Does the Philippines Need a Peso Stablecoin? Community Weighs In
Editing and additional information by Michael Mislos
While Coins.ph’s recent announcement of launching a PHP (peso) stablecoin is not the first of its kind that was announced through the years, it was the first one to check all the boxes that therefore warranted extended conversations:
- It is announced by Coins.ph, arguably the most prominent crypto brand in the Philippines.
- It is approved by the Bangko Sentral ng Pilipinas (BSP).
- It is launching to retail users by June 2024.
Thus, the new asset received various reactions from the wider crypto community.
(Read the previous article where BitPinas outlined the previous Peso stablecoin initiatives of various organizations)
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Coins must clarify its objectives
Carlos Tapang, the CEO of ROKS stable token developer Rock Stable, said a peso stablecoin has a lot of benefits in terms of utilizing cryptocurrency liquidity but expressed concerns about market size and potential redemption delays.
Tapang noted that stablecoins offer superior liquidity compared to fiat currencies. He elaborated that, with a peso stablecoin, individuals can quickly transfer large sums while ensuring almost immediate reception by the recipient, all thanks to the stablecoin’s underlying blockchain technology.
“Try this with a bank account and I’m sure the bank manager would have a word with you first. The fastest you can do this transaction with PHP is probably at least a day.”
Carlos Tapang, CEO, Rock Stable
However, Coins.ph, Tapang said, must clarify its objectives for the peso stablecoin. If the stablecoin is intended for trading purposes, traders could profit from the ease of transferring funds between different centralized exchanges, provided that other virtual asset service providers readily accept PHPC.
“If that is the objective, I think Coins.ph should sell the idea first to the other VASP licensees. The other VASPs can then demand that Coins.ph shoulder all the fees. It would still be a good deal for (them) to make transactions free (no fees) if they want to gain network effects quickly… I think this can enhance the adoption of cryptos significantly. Imagine how difficult it is to transfer PHP from one CEX to another currently.”
Carlos Tapang, CEO, Rock Stable
Peso stablecoins can bypass 6% remittance fees
Aside from Tapang, other crypto personalities also expressed their opinions on the upcoming launch of the peso-backed stablecoin.
Gabby Dizon, Co-Founder of Yield Guild Games, expressed enthusiasm about PHPC, noting its potential benefits for Filipinos, especially families receiving remittances from abroad.
“This is great news, and a lot of Filipinos will benefit from a Philippine peso stablecoin, especially those still paying 6% fees to traditional remittance companies.”
Gabby Dizon, co-founder, Yield Guild Games
A Push for Mass Adoption
Web3-focused content creator Kookoo Crypto TV also commented on the announcement. He highlighted the significance of a peso-backed stablecoin for Overseas Filipino Workers, citing the substantial $37.2 billion USD in personal remittances.
“This is a huge step forward to mass adoption when a peso-backed stablecoin is available as their option to send money… Which also means, a great support for faster economic growth,” Kookoo stated and even teased that he is ready to assist in explaining its use to anyone abroad.
On the other hand, Filipino crypto educator and trader Coach Miranda Miner, or Arlone Paul Abello, created a two-part short videos (1,2) explaining what PHPC is and how it will function while it is still in BSP’s sandbox and after Coins.ph finishes the trial.
“Overall, napakagandang improvement, babantayin po natin. Pero for me, it is actually a start of an adoption in the Philippine setting, although in a controlled environment, ng konsepto ng cryptocurrency. Simula tayo sa stablecoin, and who knows (what) other tokens can be approved very soon,” he commented.
[Translation: Overall, it’s a very good improvement, let’s keep an eye on it. But for me, it is actually the start of adoption in the Philippine setting, although in a controlled environment, of the concept of cryptocurrency. We’re starting with a stablecoin, and who knows what other tokens can be approved very soon.]
Modern Mulan, another prominent figure in the crypto community, has produced informative videos (1,2) explaining the concept of stablecoins and highlighting the potential benefits of PHPC. She asserts that the peso-backed stablecoin heralds advantages for Overseas Filipino Workers (OFWs), crypto enthusiasts, and tech businesses alike.
“Win-win situation ito para sa mga tao tsaka sa mga businesses. Para sa mga tao, you get to spend in crypto, nababayaran ka rin in crypto; mas mabilis yung transaction at mas mababa ‘yung fees… I think makakakita rin tayo ng bagong development on different services and even applications of blockchain technology.”
Modern Mulan
[Translation: This is a win-win situation for both people and businesses. For individuals, you can spend and get paid in crypto; transactions are faster and fees are lower… I think we’ll also see new developments in various services and applications of blockchain technology.]
Luis Buenaventura, a GCash executive and author of the Cryptoday newsletter, believes a peso stablecoin could make local exchanges obsolete as traders might prefer using it to directly access global markets.
“The most interesting outcome is that it will render the local exchange industry irrelevant,”
Luis Buenaventura, Author at Cryptoday
However, he warns of regulatory challenges as on-chain pesos could enable direct, unregulated transactions. “If you wanted to donate to controversial factions, buy restricted items, or send money internationally, you can now do it directly,” he noted, calling for robust regulatory measures.
Despite potential pitfalls, Buenaventura remains optimistic about the benefits of the Philippine peso on-chain for reducing crypto trading fees. “I am a big believer, but I’m also hyper-aware of the challenges,” he concluded.
What is PHPC?
PHPC is a stablecoin pegged 1:1 to the Philippine peso. It is noted to offer users stability against the volatile market movements seen in other cryptocurrencies like Bitcoin.
Coins.ph also said it is fully backed by cash reserves in local bank accounts and aims to provide a reliable digital alternative to the traditional peso.
Read: Coins.ph to Launch $PHPC, a Philippine Peso-Pegged Stablecoin, in June 2024
With approval from the Bangko Sentral ng Pilipinas, Coins.ph plans to launch PHPC and make it available for retail use, starting with an early public test phase in early June 2024.
Read: An Overview of Peso-Backed Stablecoins in the Philippines
This article is published on BitPinas: Does the Philippines Need a Peso Stablecoin? Community Weighs In
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