Major banks in the Philippines, including UnionBank of the Philippines (UBX), Rizal Commercial Banking Corporation (RCBC), Cantilan Bank, and the Rural Bank of Guinobatan, have recently unveiled ‘PHPX,’ a new stablecoin pegged to the Philippine Peso (PHP).

Developed in collaboration with Web3 fintech company JUST Finance, PHPX is designed to streamline cross-border payments, remittances, and foreign exchange transactions, positioning the Philippines to tap into the burgeoning global stablecoin market, which reached an impressive US$9 trillion in transactions in the first half of 2024.

“This initiative empowers Filipinos with secure, high-yield financial tools, fostering a culture of savings and investment,” said David Inderias, CEO of JUST Finance. “It’s a game-changer for financial inclusion and accessibility, enabling Filipinos to hold PHP on-chain and invest in tokenized assets.”

For his part, Lito Villanueva, acknowledged as the Philippines’ leading and award-winning thought leader on inclusive digital finance and who is also the chairman of FinTech Alliance.PH, shared, “PHPX’s regulated framework will enhance cross-border remittances and payments, providing Filipinos worldwide with faster, cheaper, and more secure financial solutions.”

The introduction of PHPX marks a significant milestone in banks and the Philippine financial sector as a whole, particularly as the country has one of the highest remittance inflows in the world. The stablecoin is backed by bank collateral, offering a high level of security and transparency with real-time auditing.

This move is expected to lower transaction costs and speed up processes in both remittances and foreign exchange swaps, which are vital for the Philippine economy, given the large number of Overseas Filipino Workers (OFWs) sending money home.

Banks forms partnership for future of finance

PHPX is the result of a strategic collaboration between local banks and JUST Finance, a partnership formed between FSCO and Ayannah, a Filipino fintech company known for its innovations in digital payments.

According to a company press release, the stablecoin is designed to enhance financial inclusion, facilitate smoother cross-border transactions, and provide a bridge between traditional banking and the emerging world of digital finance.

The Philippines is one of the top remittance-receiving countries in the world, with remittances accounting for a substantial portion of the national GDP.

By launching PHPX, the banks hope to provide a more efficient, cost-effective solution for the Filipino diaspora who regularly send money back home. As remittances are a critical lifeline for millions of Filipino families, the ability to reduce the cost and increase the speed of these transactions is expected to have a positive impact on the economy.

Bank-backed security with regulatory compliance

One of the key differentiators of PHPX is its bank-backed security. The stablecoin is collateralized by the reserves of the participating banks, ensuring that each PHPX issued is fully backed by Philippine Pesos.

This provides a level of security that is not always guaranteed with other cryptocurrencies or stablecoins. Additionally, the distribution of PHPX is managed exclusively through licensed banks, ensuring that the stablecoin remains compliant with Philippine financial regulations.

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In an era where regulatory uncertainty surrounds many cryptocurrencies, the partnership with established banks offers a level of confidence for both consumers and businesses.

Real-time auditing mechanisms will provide transparency in the stablecoin’s operations, assuring stakeholders that each unit of PHPX in circulation is backed by an equivalent amount of bank collateral.

Cross-border efficiency, investment opportunities

PHPX is also designed to enhance the efficiency of cross-border payments, particularly by allowing seamless conversions with other major stablecoins like USDC (USD Coin) and EURC (Euro Coin).

This will make it easier for individuals and businesses to engage in foreign currency exchanges without the high fees and delays often associated with traditional banking systems or existing crypto solutions.

Additionally, PHPX is poised to create new investment opportunities for Filipinos. The stablecoin will facilitate access to tokenized investments in bonds and exchange-traded funds (ETFs) denominated in PHP, USD, and EUR.

This provides Filipinos with a way to diversify their portfolios and participate in global markets, potentially offering higher yields than traditional bank savings accounts or other investment vehicles.

The launch of PHPX comes at a time when the global stablecoin market is experiencing rapid growth, with stablecoins accounting for trillions in transactions.

A major step to integrate blockchain, digital assets into PH finance

As the Philippines continues to embrace digital innovation, the introduction of PHPX represents a major step in the country’s ongoing efforts to integrate blockchain and digital assets into its financial system.

With the backing of trusted banks and the regulatory oversight that comes with them, PHPX aims to become a trusted digital asset for Filipinos both at home and abroad.

The stablecoin’s ability to reduce transaction costs, speed up cross-border payments, and offer new investment opportunities is expected to drive widespread adoption and support the financial aspirations of millions of Filipinos worldwide.

As the Philippine financial sector takes this leap into the digital age, PHPX could pave the way for future innovations in the country’s growing fintech ecosystem, positioning the Philippines as a leader in the global digital finance space.

By Ralph Fajardo

Ralph is a dynamic writer and marketing communications expert with over 15 years of experience shaping the narratives of numerous brands. His journey through the realms of PR, advertising, news writing, as well as media and marketing communications has equipped him with a versatile skill set and a keen understanding of the industry. Discover more about Ralph's professional journey on his LinkedIn profile.