Philippine Central Bank to Conduct Trials for National Stablecoin PHPC
Summary:
The Philippine Central Bank (Bangko Sentral ng Pilipinas) is set to conduct controlled trials of a national stablecoin, PHPC, in collaboration with crypto wallet provider Coins.ph. The trials, part of BSP's Regulatory Sandbox Framework, aim to observe PHPC's real-world performance and its impact on the local fiat system. Potential applications of the stablecoin include transactions, virtual asset trading, and providing collateral in DeFi applications. The move follows UnionBank's 2019 launch of its own peso-pegged stablecoin, PHX.
The central bank of the Philippines is set to commence a controlled trial of a national stablecoin that matches the local peso in a 1:1 ratio. The Philippine Central Bank, also known as Bangko Sentral ng Pilipinas (BSP), has given its nod for a pilot involving PHPC, a locally supported stablecoin, in alliance with cryptocurrency wallet provider Coins.ph. This approval is pursuant to BSP's Regulatory Sandbox Framework. As part of this arrangement, Coins.ph holds the responsibility of maintaining peso cash reserves corresponding to the PHPC stablecoin's circulating supply within the sandbox environment. The announcement stated that the objective of this local currency pegging is to streamline the conversion of PHPC back to the corresponding physical fiat counterpart.
The tests within the sandbox are aimed at determining the real-time functionality of the PHPC stablecoin and how it impacts the local fiat system. The potential application of PHPC includes domestic and international payments, virtual asset trading, safeguarding against market fluctuations, and providing collateral and liquidity in DeFi applications. The outcome will guide the transition of PHPC from a sandbox to live environment. However, any official public release will be contingent upon final checks and approvals from the central bank. As per local stipulations, the trial period could vary from three to twelve months post the pilot go-live date, subject to the complexity of the project. However, no confirmed timeline was shared at the time of the stablecoin experiment announcement.
In July 2019, the first stablecoins backed by the Philippine peso came into existence, spearheaded by UnionBank, a local commercial firm. UnionBank launched a stablecoin named PHX, pegged to the Philippine peso, aimed at expanding financial inclusivity. This undertaking was a complement to the BSP's advocacy for digital financial inclusion for citizens and communities. It was disclosed in a related report by PhilStar Global that UnionBank's platform i2i was being used to operationalize PHX. The term i2i stands for island-to-island, institution-to-institution, and individual-to-individual. Similar to PHPC, PHX can also be smoothly redeemed for pesos, which are then deposited back into the users' UnionBank accounts.
Published At
5/13/2024 11:36:15 AM
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