The Bangko Sentral ng Pilipinas (BSP), the Philippines’ central bank, has embarked on a pioneering project to test a national stablecoin directly pegged to the Philippine peso. Named PHPC, this digital currency is being developed in collaboration with Coins.ph, a prominent crypto wallet provider, under the guidance of BSP’s Regulatory Sandbox Framework.
This initiative involves Coins.ph maintaining an equivalent amount of cash reserves in pesos, matching the circulating supply of the PHPC stablecoin. This strategic move aims to simplify the conversion process between the digital stablecoin and its physical counterpart, ensuring seamless transactions within the controlled sandbox environment.
The main objective of the sandbox testing is to evaluate the performance of the PHPC stablecoin in real-world settings and its potential impact on the traditional fiat currency system. The applications for PHPC are extensive, ranging from facilitating both domestic and international payments, to serving as a trading medium with other virtual assets, and providing stability and liquidity in decentralized finance (DeFi) platforms.
The results from this testing phase will be crucial in determining whether PHPC can transition from an experimental phase to mainstream usage. Although the prospect of a public rollout is promising, it will hinge on comprehensive evaluations and final approvals by BSP.
The timeline for this experimental phase is flexible, potentially extending from three to twelve months, reflecting the complexity of the project. This initiative builds on previous efforts, notably the 2019 launch of UnionBank’s PHX, another peso-backed stablecoin aimed at enhancing financial inclusion across the Philippines.
With these developments, the Philippines is positioning itself at the forefront of digital finance, potentially setting a precedent for future monetary policies worldwide.