[Finterest] What is PHPC, the Philippines’ first stablecoin, and can it go mainstream?

MANILA, Philippines – The launch of the Philippines’ first stablecoin, PHPC, by Coins.ph generated quite the buzz in the local crypto community. But what exactly is this, and how can the average Filipino use it?

PHPC is a stablecoin, a type of cryptocurrency that is pegged 1:1 to fiat money. In this case, every PHPC is exactly equivalent to one Philippine peso. Because of this, users of the token are not subjected to the volatile swings in market value that other cryptocurrencies like Bitcoin experience.

“It’s a digital representation of the Philippine peso, meaning on a fundamental level, whatever we have is backed one-is-to-one,” Coins.ph country manager Jen Bilango said on Monday, August 5.

Coins.ph, the issuer of PHPC, fully backs the stablecoin with cash and cash equivalents stored in bank accounts. PHPC is also being tightly monitored by the Bangko Sentral ng Pilipinas (BSP) under its Regulatory Sandbox Framework.

The strongest use cases for stablecoins are cross-border payments and remittances. Remitting money in crypto instead of, say, US dollars allows Filipinos to skip longer wait times and high fees in traditional financial institutions like banks and “pera padala” centers. Using stablecoins instead of a volatile token like Bitcoin takes away the worry of losing money due to fluctuating exchange rates. (READ: Coins.ph goes global with crypto option for remittances)

“Why do you have to have a digital representation of the peso on the blockchain? It allows you to leverage the technology, which is basically fast settlement and a cheap way of sending money everywhere around the world,” Bilango said. “That is what our stablecoin is leveraging.”

According to Bilango, Coins.ph has already piloted cross-border payments from Australia to the Philippines using PHPC. She added that they have “received interest from different corridors in terms of making PHPC available” in Dubai, Singapore, and the United States.

Other use cases that Coins.ph has observed during PHPC’s launch include using it to buy into other tokens like Bitcoin and Ethereum for trading, and holding it to hedge for market volatility.

PHPC adoption ‘fairly good’

About a month after launching the Philippines’ first stablecoin, Coins.ph is now getting ready to bring PHPC out of the sandbox phase and into the hands of more Filipinos.

Back in May, the local cryptocurrency platform announced that it had gotten BSP approval to issue PHPC and list it on its exchange as part of an early public test period. Now, as Coins.ph is submitting its first report to the central bank, executives believe there is much to be optimistic about.

“We do think we can exit [the sandbox] quite soon actually,” Coins.ph global marketing director Kat Gonzales said on the sidelines of the launch of their new brand ambassador. “We’re probably looking at another month or so.”

Moving past the sandbox period could mean further growing the volume of issued PHPC tokens, as the BSP had restricted the volume during the initial launch, alongside other limitations.

Bilango told Rappler that the reception of the token so far has already been “fairly good,” with more than 50% of PHPC’s circulating supply being taken up.

“In terms of [key performance indicators], and in terms of what we’ve said, the numbers are looking good,” Bilango said. “We’re asking BSP if we can expand the sandbox, but that’s something subject to discussions with them.”

PHPC is currently launched on the Ronin blockchain, the same popular gaming blockchain that Axie Infinity’s tokens use. Coins.ph has over 18 million users on its platform. – Rappler.com

Finterest is Rappler’s series that demystifies the world of money and gives practical advice on how to manage your personal finance.