The Philippines launches a peso-backed stablecoin experiment.
The Central Bank of the Philippines will begin trials of a national stablecoin at 1:1 to the local peso.
The Bangko Sentral ng Pilipinas (BSP) has partnered with crypto wallet provider Coins.ph to approve a Philippine peso-backed stablecoin pilot for PHPC. The grant is approved by the BSP regulatory sandbox framework.
As part of the agreement, Coins.ph will hold a cash reserve in pesos equal to PHPPC's stable coin circulation in the sandbox. The local currency peg aims to ease PHPC's transition to a physical fiat counterpart, the announcement said.
The sandbox test is aimed at testing the PHPC stablecoin's real-world performance and impact on the local fiat ecosystem.
“Potential uses of PHPC include domestic and cross-border payments, trading with other virtual assets, hedging market volatility, and collateral and money supply in DeFi applications.”
The results determine PHPC's leap from the sandbox to real-world use. However, formal public deployment is subject to final review and approval by the Central Bank.
Local regulations suggest that the trial period may range from three to 12 months from the trial release date, depending on the complexity of the project. It's worth noting that no official deadline was announced when the stablecoin experiment was announced.
Check out Cointelegraph's guide to learn more about using Stablecoin for daily transactions.
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Stablecoins backed by the Philippine peso were first launched in July 2019, led by Unionbank, a local commercial bank.
Unionbank has pegged the Philippine peso to the PHX, a stablecoin focused on payments to encourage greater financial inclusion. It was launched to support BSP's initiative to promote digital financial inclusion for people and communities in the country.
A related report from Philstar Global confirmed that PHX is being implemented on UnionBank's i2i platform. The term i2i stands for Island to Island, Institution to Institution and Individual to Individual.
Like PHPC, PHX is also cashless for pesos, which are then credited back to the users' Unionbank accounts.
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