Update as of 14 May, 9.30 UTC: Quotes from Wei Zhou, the CEO of Coins.ph, have been added to this article.
The central bank of the Philippines plans to conduct controlled trials of a national stablecoin that will be pegged 1:1 to the local currency, the peso.
The Bangko Sentral ng Pilipinas (BSP) has approved a pilot program for PHPC, a stablecoin backed by the Philippine peso, in collaboration with Coins.ph, a cryptocurrency wallet provider. This approval falls under the regulatory sandbox framework of the BSP.
As part of the agreement, Coins.ph will maintain cash reserves in pesos that are equivalent to the circulating supply of the PHPC stablecoin within the sandbox environment. The purpose of pegging it to the local currency is to facilitate the eventual transition of PHPC back to its physical fiat counterpart, according to the announcement.
Wei Zhou, the CEO of Coins.ph, told Cointelegraph that the company aims to meet BSP’s key user and usage metrics within a period of two to three months.
Source:
Coinsph
The purpose of the sandbox testing is to assess the real-world performance of the PHPC stablecoin and its impact on the local fiat ecosystem.
The results of the trials will determine whether PHPC will progress from the sandbox environment to actual usage. However, the final deployment of the stablecoin will be subject to further evaluations and approvals from the central bank. Zhou further explained the initiative, stating:
In accordance with local regulations, the testing period may range from three to 12 months, starting from the date when the pilot program goes live, depending on the complexity of the project. It is worth noting that no official deadline has been disclosed for the stablecoin experiment.
For more information on using stablecoins for everyday transactions, refer to Cointelegraph’s guide.
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Stablecoins backed by the Philippine peso were first introduced in July 2019, led by Unionbank, a local commercial bank.
UnionBank launched a stablecoin focused on payments, pegged to the Philippine peso and called PHX, with the aim of promoting greater financial inclusion. This initiative was launched to support the BSP’s efforts to promote digital financial inclusion for individuals and communities in the country.
A related report from PhilStar Global revealed that PHX was being implemented on UnionBank’s i2i platform. The term “i2i” stands for island-to-island, institution-to-institution, and individual-to-individual.
Similar to PHPC, PHX can be easily redeemed for pesos, which are then credited back to the users’ UnionBank accounts.
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Peso-backed stablecoin sandbox testing commences in the Philippines