Several prominent Filipino banks plan to launch a peso-backed stablecoin, PHPX, in 2023 using Hedera's DLT to improve cross-border payments, particularly benefitting overseas workers.
A Shift Toward a Publicly Exchangeable Stablecoin
UnionBank and its fintech arm UBX have been engaged in blockchain development, operating a quasi-stablecoin network in a closed loop. The bank now aims to create a publicly exchangeable stablecoin to extend its use beyond the current closed ecosystem. This initiative is focused on speeding up and enhancing the control of international money transfers.
The Role of PHPX in Cross-Border Remittances
The Philippines is among the top global recipients of remittances, making up a significant portion of the country's GDP. The current remittance systems are often slow and costly. PHPX aims to improve these processes by providing faster, more efficient, and cost-effective remittance services. This will enable families in the Philippines to receive funds directly into bank accounts and digital wallets or pay for education expenses. PHPX can also be used domestically for point-of-sale payments, offering a more efficient solution compared to traditional systems.
A Solution for Multi-Currency Stablecoin Exchange
Cross-border payments often involve currency exchanges. PHPX plans to address this by creating a platform to exchange with other stable currencies like USD, SGD, and JPY. The operations will be supported by liquidity providers, including participating banks and other qualified investors. The system will comply with regulatory standards and be based on the Hedera network, ensuring the reliability and protection of reserves backed by government bonds.
The plans for PHPX aim to create an efficient remittance system for Filipinos using distributed ledger technology. The stablecoin is expected to launch between May and July 2023, pending regulatory approval.
