The purpose of the test is to assess the practical performance of the PHPC stablecoin, as well as its effects on the regional fiat economy and future applications such as trading, payments, and DeFi.
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A national stablecoin that is 1:1 pegged to the local peso will go through controlled trials by the central bank of the Philippines.
In collaboration with cryptocurrency wallet provider Coins.ph, Bangko Sentral ng Pilipinas (BSP) authorized a stablecoin pilot program for PHPC, which is backed by the Philippine peso. The Regulatory Sandbox Framework of BSP was used to approve the grant.
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As per the agreement, Coins.ph will keep cash reserves in the sandbox environment in pesos equal to the PHPC stablecoin’s circulating supply. According to the announcement, the local currency peg is intended to facilitate PHPC’s return to its physical fiat twin.
The purpose of the sandbox testing is to evaluate the PHPC stablecoin’s real-world performance and its effects on the regional fiat economy.
“PHPC’s potential uses include domestic and cross-border payments, trading with other virtual assets, hedging against market volatility, and providing collateral and liquidity in DeFi applications.”
The outcome will decide when PHPC moves from a development environment to a production setting. However, the central bank’s final assessments and approvals are required before a formal public deployment can take place.
According to local regulations, depending on the complexity of the project, the testing period may last anywhere from three to twelve months after the pilot go-live date. It’s crucial to remember that when the stablecoin experiment was announced, no precise date was given.
July 2019 saw the launch of the first stablecoins backed by the Philippine peso, spearheaded by the local commercial bank Unionbank.
UnionBank introduced PHX, a stablecoin centered on payments and backed by the Philippine peso, in an effort to promote greater financial inclusion. The project was started to aid BSP’s efforts to promote digital financial inclusion for the nation’s citizens and communities.
According to a related report from PhilStar Global, UnionBank’s i2i platform was using PHX. Island-to-island, institution-to-institution, and individual-to-individual are the acronyms that make up the term “i2i.”
Similar to PHPC, PHX can be easily redeemed for pesos, which are subsequently returned to the users’ UnionBank accounts.
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