The Central Bank of the Philippines (BSP) has approved the launch of a pilot project for PHPC, a stablecoin pegged 1:1 to the Philippine peso. Local crypto exchange Coins.ph is participating in the tests.

The test will take place according to
rules special “regulatory sandbox” BSP. Coins.ph will maintain cash reserves in pesos equivalent to the number of PHPC stablecoins in circulation in the sandbox. Testing will show the capabilities of the PHPC stablecoin and the extent of its potential impact on the local financial system.

PHPC will test domestic and cross-border payments, virtual asset trading, and provide liquidity to DeFi applications. During the pilot project, it should become clear whether a stablecoin can become a means of hedging market volatility. Testing will last from three to 12 months from the launch date of the pilot project, depending on the complexity. The official start date for testing has not yet been announced.

Coins.ph CEO Wei Zhou
named PHPC is the first Philippine stablecoin designed for retail customers. Zhou expects PHPC to enable Filipino citizens to make fast, cheap and transparent digital asset transactions. Initially, the users of the stablecoin will be Filipinos and foreign companies serving the local market. They will be able to conduct transactions with PHPC in real time, regardless of the opening hours of banks or traditional payment systems, Zhou assured.

In early 2023, the BSP announced its willingness to explore digital currencies for more efficient transactions between financial institutions. The regulator later announced that it would use the Hyperledger Fabric blockchain to test Agila, its own wholesale digital currency.