Pilot testing of Peso-backed stablecoin sandbox initiated in the Philippines

The central bank of the Philippines is set to commence controlled trials of a national stablecoin that will be pegged 1:1 to the local peso currency. Bangko Sentral ng Pilipinas (BSP) has granted approval for the pilot of PHPC, a stablecoin backed by the Philippine peso, in partnership with Coins.ph, a cryptocurrency wallet provider. This approval falls under the regulatory sandbox framework of the BSP. As part of the agreement, Coins.ph will hold cash reserves in pesos that are equivalent to the circulating supply of the PHPC stablecoin within the sandbox environment. The aim of pegging the stablecoin to the local currency is to facilitate its transition back to physical fiat currency. Wei Zhou, the CEO of Coins.ph, stated that the company expects to achieve BSP’s key user and usage metrics within a period of two to three months.
Source: Coinsph
The purpose of the sandbox testing is to assess the real-world performance of the PHPC stablecoin and its impact on the local fiat ecosystem. The results of this testing will determine whether PHPC can move from a sandbox environment to actual usage. However, the official deployment of the stablecoin will be subject to final evaluations and approvals by the central bank. Zhou further explained the initiative by stating that the testing duration can vary from three to 12 months, depending on the complexity of the project, as stipulated by local regulations. It is worth noting that no official deadline has been disclosed for the stablecoin experiment.
For more information on using stablecoins for everyday transactions, refer to Cointelegraph’s guide.
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Stablecoins backed by the Philippine peso were initially introduced in July 2019, led by UnionBank, a local commercial bank. UnionBank launched a stablecoin focused on payments, pegged to the Philippine peso and known as PHX, in order to promote greater financial inclusion. This initiative was launched to support BSP’s efforts to promote digital financial inclusion for individuals and communities in the country. According to a report from PhilStar Global, PHX was being implemented on UnionBank’s i2i platform, which stands for island-to-island, institution-to-institution, and individual-to-individual. Similar to PHPC, PHX can be easily redeemed for pesos, which are then credited back to the users’ UnionBank accounts.
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