Philippines initiates Sandbox testing to access the real-world performance of the PHPC stablecoin. This testing affects the local fiat ecosystem, and its potential applications, such as payments, trading, and DeFi.
The Philippine central bank is about to initiate controlled trials of a national stablecoin that is pegged 1:1 to the local peso.
In partnership with the crypto wallet, the Bangko Sentral ng Pilipinas (BSP) approved a pilot of PHPC, a Philippine peso-backed stablecoin. This grant gets approval under BPS‘s regulatory sandbox framework.
As the agreement stated, the coin will keep the money reserve in pesos equal to the total circulation supply of the token within the sandbox environment. As per the announcement, this matching with the local currency intends to facilitate PHPC’s transition back to physical fiat currency.
“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 results of the PHPC will decide, whether this coin will come out of the sandbox and fit the real world or not. However, any official launch will depend on final testing and approvals from the Central Bank of the Philippines.
According to the local regulation suggestions, the testing can take 3 to 12 months from the pilot to go live, depending on the complexity of the project. Authorities did not announce a deadline after starting the stablecoin experiment.
A local commercial bank named Union Bank first debuted the Philippine peso stablecoin in July 2019.
UnionBank introduced a payment-oriented stablecoin named PHX in 2019. This ties to the Philippine peso, aiming to promote broader financial inclusion. The initiative started to support the BSP’s efforts to encourage digital financials across the country.
A report from PhilStar Global disclosed that UnionBank was implementing PHX on its i2i platform. The term i2i stands for island-to-island, institution-to-institution, and individual-to-individual.
Similar to PHPC, PHX can be easily exchanged for pesos. These are then deposited back into users’ UnionBank accounts.
