- BSP approves pilot for peso-backed stablecoin PHPC in collaboration with Coins.ph.
- Sandbox testing to evaluate PHPC’s real-world performance and impact on the local fiat ecosystem.
- Changes to real-world use subject to final assessment and approval by the Central Bank.
The digital currency landscape in the Philippines is set for a major change after the country’s central bank, the Bangko Sentral ng Pilipinas (BSP), gave approval to launch a pilot program for a Philippine peso-backed stablecoin (PHPC).
BHP’s move signals a progressive step towards exploring the potential of blockchain technology and stable coins in the country’s financial ecosystem.
Sandbox testing to evaluate the feasibility of PHPC
The pilot program, conducted within the framework of the BSP’s Regulatory Sandbox, will see collaboration between the central bank and crypto wallet provider Coins.ph.
#ICYMI, #coinsph Was awarded @bangkocentral (BSP) approved to pilot Philippine peso stablecoin PHPC
Learn more about this milestone and the pilot here: https://t.co/zpQQvr7Pv9 pic.twitter.com/a2jWB8mSeJ
– coins.ph (@coinsph) 9 May 2024
The primary objective of the pilot program is to assess the real-world performance of PHPC and its potential impact on the local fiat ecosystem.
Under the terms of the pilot, Coins.ph will maintain cash reserves in pesos equal to the circulating supply of PHPC within the sandbox environment, ensuring a stable 1:1 pegging of the digital currency to the Philippine peso.
BSP’s choice of Coins.ph is strategic. Being a licensed crypto service provider in the Philippines, Coins.ph dominates the Philippines crypto sector, especially after Partnership with Circle in 2023 For USDC remittance to Philippines. this was it First add BRC-20-support In the Philippines.
The sandbox testing phase is designed to explore various use cases for PHPC, including domestic and cross-border payments, trading with other virtual assets, hedging against market volatility, and in decentralized finance (DeFi) applications. Involves providing collateral and liquidity.
These trials will provide valuable insights into the practicality and effectiveness of the PHPC in facilitating financial transactions and promoting financial inclusion in the Philippines.
Transition from sandbox to real-world use
While the pilot program is an important milestone in the development of PHPC, its transition from sandbox environment to real-world use is dependent on the results of the testing phase and final assessment by the central bank.
Depending on local regulations, the length of the trial period can range from three to 12 months depending on the complexity of the project. However, no official timeframe has been disclosed for the conclusion of the stablecoin experiment.
The current initiative to launch a peso-backed stablecoin builds on previous efforts to introduce stablecoins pegged to the Philippine peso, such as PHX launched by UnionBank in 2019. UnionBank’s PHX, which aims to promote greater financial inclusion, can also be redeemed and applied for pesos. On the Bank’s i2i platform.
The emergence of PHPC and other stablecoin projects reflects the growing recognition of digital currencies as viable tools to enhance financial services and expand access to digital payments in the Philippines.
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