Philippines Greenlights Peso-Linked Stablecoin Pilot

The Central Bank of the Philippines (BSP) has approved a pilot project for the PHPC, a stablecoin pegged to the Philippine peso.

This project is part of the BSP's regulatory sandbox framework, which aims to promote financial innovation in a safe, regulated environment.

Philippines bet on peso-linked stablecoin

Crypto wallet provider Coins.ph has developed PHPC, a peso-backed stable coin. It is pegged 1:1 with the Philippine peso and is backed by cash reserves. This stable coin simplifies and accelerates domestic and international money transfers, providing a digital alternative to traditional banking.

The pilot will thoroughly test the practical applications of PHPC and its impact on the financial system. It evaluates cross-border payments, trading with other digital assets, and decentralized finance (DeFi) applications as collateral.

The sandblasting test is important to test the functional effectiveness and stability of PHPC. It allows the BSP to ensure that innovations like the PHPC do not compromise consumer protection, data security or financial integrity. It also ensures compliance with Anti-Money Laundering (AML), Counter-Terrorism Financing (CTF) and Proliferation Financing (PF) standards.

If the pilot is successful, it could lead to widespread adoption. This will change how local and foreign users manage and transfer money. In fact, PHPC may transition to a formal public release pending final reviews and approvals by the BSP.

“This pilot marks an important step for Coins.ph and the broader financial landscape in the Philippines. It serves as a critical platform to explore the potential of digital currencies to enhance financial inclusion,” Coins.ph explained.

Read more: Guide to the Best Stablecoins in 2024

The PHPC pilot is expected to last three to twelve months, but the BSP has not set an official end date. This step is critical to gathering information to assess the feasibility of a public launch of PHPC.