Philippines central bank greenlights trials for PHPC, a peso-backed stablecoin, in partnership with Coins.ph under the Regulatory Sandbox Framework.
In regulated trials, the central bank of the Philippines will launch a national stablecoin pegged 1:1 to the local peso.
A pilot program for PHPC, a stablecoin supported by the Philippine peso, was authorized by the Bangko Sentral ng Pilipinas (BSP) in collaboration with crypto wallet provider Coins.ph. BSP authorized the grant in accordance with its Regulatory Sandbox Framework.
Coins.ph will uphold currency reserves in pesos commensurate with the circulating supply of the PHPC stablecoin in the sandbox environment, as stipulated in the agreement.
According to the announcement, the purpose of pegging local currency is to facilitate PHPC’s return to its physical fiat counterpart.
The purpose of the sandbox testing is to evaluate the PHPC stablecoin’s impact on the local fiat ecosystem and its efficacy in the real world.
“PHPC’s potential uses include domestic and cross-border payments, trading with other virtual assets, hedging against market volatility, and providing collateral and liquidity in DeFi applications.”
The outcomes will dictate whether PHPC transitions from an experimental environment to practical implementation. Nonetheless, the central bank will conduct final evaluations and grant approvals before a formal public deployment.
Local regulations indicate that, depending on the intricacy of the project, the testing period may span between three and twelve months after the pilot goes live. Notably, no official deadline was specified in the announcement of the stablecoin experiment.
First introduced in July 2019, stablecoins pegged to the Philippine peso were spearheaded by Unionbank, a local commercial bank.
PHX, a payments-oriented stablecoin pegged to the Philippine peso, was introduced by UnionBank to promote greater financial inclusion. The initiative was initiated in support of BSP’s efforts to promote digital financial inclusion for the nation’s citizens and communities.
According to a report from PhilStar Global, PHX was being integrated into the UnionBank i2i platform. Isolation-to-island, institution-to-institution, and individual-to-individual comprise the acronym i2i.
Similar to PHPC, PHX can be redeemed without any hassle for pesos, which are subsequently refunded to the users’ UnionBank accounts.
