Editing by Nathaniel Cajuday
The central bank sees stablecoins as a plausible solution for more efficient payment transactions in the country, according to Director Mhel Plabasan of the Bangko Sentral ng Pilipinas (BSP).
Speaking during a panel discussion at Forkast’s “Crypto Rising: CBDCs & Stablecoins: The Asia Perspective” livestream, Plabasan noted that they are integrating a flexible approach to the said coin after they finished testing the use of stablecoins as a mode of payment.
“We have seen it really has the potential to revolutionize both domestic and cross-border payment more affordable, faster, and even the possibility of using stablecoins to make cross-border remittance efficient,” Plabasan said.
Stablecoins are a type of cryptocurrency that is pegged with fiat, or can also be gold, at a 1:1 ratio. It is categorized into three: fiat-backed, crypto-backed and algorithmic.
Last month, Cebu City Vice Mayor Raymond Alvin Garcia revealed that the city, in collaboration with C Pass Inc., has been developing C-Peso, a stablecoin aiming to be a way to promote cashless payments in the city. According to him, the coin has entered the third stage of the registration process for Virtual Asset Service Providers. (Read more: C-Pass Inc Signs MOU to Eye Use of Its Crypto Coin C-Peso in Cebu City)
In a recent index report from Chainalysis, the Philippines ranked 2nd, just 0.25 points behind Vietnam, in crypto adoption among the 154 countries surveyed by measuring their key trading metrics through centralized exchanges, DeFi protocols, and peer-to-peer trading volume. (Read more: PH Ranks 2nd in Chainalysis Crypto Adoption Report)
While as per the first quarter report of 2022 of crypto wallet Metamask, the Philippines also has the third highest number–3.57 million– of wallet users. (Read more: Philippines Rank Third in Most Number of MetaMask Users in Q2 2022)
However, despite all this rapid adoption of cryptocurrency and the technology behind it, there are still no clear laws addressing some of its loopholes that may be exploited by scammers and digital thieves. In fact, the Banko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) are both requesting legislation to create definite rules and regulations on digital assets and the digital space.
Opposed to the current view of the BSP, Governor Felipe Medalla disregarded cryptocurrency last June, saying that he’s not keen on regulating it and dubbed it as based on the “greater fool theory.” (Read more: Incoming BSP Governor Dismisses Crypto, Not Keen in Regulating)
On the other hand, because stablecoins are now seen by the central bank as a sustainable payment method, an annual economic report from the Bank for International Settlements (BIS) showed that the central bank digital currency (CBDC), and not cryptocurrency, is the future of the world’s monetary systems.
Fortunately, the BSP has already slated its own CBDC. In May, the central bank started onboarding several banks and financial institutions for the pilot testing of the CBDC by the last quarter of the year.
The launch of the CBDC was announced last March and it will pursue the pilot project of a wholesale CBDC as part of its aim to promote the stability of the country’s payment system. (Read more: BSP CBDC Digital Currency Initiative Scheduled for Q4 2022)
Moreover, just this month, the central bank and the Monetary Board (MB), BSP’s policy-making body, approved the Test and Learn Framework, or the Regulatory Sandbox.
It will allow the central bank-regulated institutions to test and offer some innovative products in a controlled environment. (Read more: Bangko Sentral OKs Regulatory Sandbox for Banks)
This article is published on BitPinas: BSP Director: Stablecoins Can Make Payments More Efficient
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