The Philippine central bank, Bangko Sentral ng Pilipinas (BSP), is set to initiate a controlled trial of a national stablecoin that will be pegged 1:1 to the local peso. BSP has collaborated with crypto wallet provider Coins.ph to greenlight a pilot program for PHPC, a stablecoin backed by the Philippine peso. This approval falls under BSP’s regulatory sandbox framework, allowing for experimentation within a controlled environment.
Under the arrangement, Coins.ph will uphold a cash reserve equivalent to the circulating supply of the PHPC stablecoin in a sandbox setting. The stablecoin's peg to the local currency is aimed at facilitating its seamless transition to physical fiat currency, as per the official announcement.
Coins.ph CEO Wei Zhou disclosed the company's intent to capture BSP's primary users and usage metrics within a two to three-month timeframe. The sandbox trial is strategically devised to assess PHPC's actual performance and its impact on the local fiat ecosystem.
PHPC is envisioned to serve various purposes, including domestic and cross-border payments, virtual asset trading, market volatility hedging, and providing collateral and liquidity in decentralized finance (DeFi) applications. The outcome of the trial will dictate PHPC's progression from the sandbox environment to real-world adoption, although formal public deployment hinges on BSP's final evaluation and endorsement, Zhou elaborated.
The testing phase's duration, as per local regulations, may span between 3 to 12 months from the pilot's commencement, contingent upon the project's complexity. However, no explicit deadline was disclosed upon the announcement of the stablecoin experiment. The Philippine peso-backed stablecoin, initially introduced in July 2019 by local commercial bank Union Bank, aimed to drive greater financial inclusion, aligning with BSP's advocacy for digital financial inclusion across the nation. UnionBank's PHX stablecoin, which operates on the i2i platform, shares a similar objective with PHPC in terms of being easily redeemable for pesos, which are then credited to the user's UnionBank account.
