The Philippine central bank will begin controlled trials of a national stablecoin pegged 1:1 to the local peso.
The Bangko Sentral ng Pilipinas (BSP) has approved a beta for PHPC, a stablecoin backed by the Philippine peso, in partnership with cryptocurrency wallet provider Coins.ph. The grant was approved under the BSP’s regulatory Sandbox framework.
As part of the deal, Coins.ph will hold peso cash reserves equivalent to the circulating supply of the PHPC stablecoin within the sandbox. The announcement said that the local currency peg aims to facilitate PHPC’s transition to its physical twin.
The sandbox test aims to test the real performance of the PHPC stablecoin and its impact on the local monetary ecosystem.
“Potential uses for PHPC include domestic and cross-border payments, trading with other virtual assets, hedging against market volatility, and providing collateral and liquidity in DeFi applications.”
The results will determine PHPC’s leap from sandbox to real-world use. However, the official public release will be subject to final evaluations and approvals by the Central Bank.
Local regulations indicate that the duration of testing can range from three to 12 months from the start date of the trial run, depending on the complexity of the project. It is important to note that no official deadline has been revealed when the stablecoin trial will be announced.
Check out Cointelegraph’s guide to learn more about using stablecoins in everyday transactions.
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Stablecoins backed by the Philippine peso debuted in July 2019, led by Unionbank, a local commercial bank.
UnionBank has launched a payments-focused stablecoin pegged to the Philippine peso, PHX, to promote financial inclusion. This initiative was launched to support BSP’s campaign to advocate for digital financial inclusion for people and communities in the country.
A related report from PhilStar Global revealed that PHX was implemented on UnionBank’s i2i platform. The term i2i is an abbreviation for “island-to-island, organization-to-enterprise, and individual-to-individual.”
Like PHPC, PHX can also be easily redeemed for pesos, which are then returned to users’ UnionBank accounts.
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