Philippines could soon be employing stablecoins for cross-border payments

Sahana Kiran
Source – Unsplash

Stablecoins have remained a hot topic throughout 2022. Starting from the whole Terra fiasco it still seemed to be going on as regulators have been trying to scrutinize the market. While governments across the globe have been urging the public to steer away from stablecoins, the Philippines seemed to be looking at the bright side of things.

Mhel Plabasan, a Director at the Philippines’ central bank Bangko Sentral ng Pilipinas revealed that the bank was inclined towards stablecoins. He noted that stablecoins entailed the ability to benefit the payment network of the entire country.

Speaking at the “Crypto Rising: CBDCs & Stablecoins: The Asia Perspective” panel, he added,

“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.”

The remittance market in the Philippines is quite pertinent. From 1989 to 2022, remittances to the Philippines had an average annual growth rate of 1172945.16 USD million, with a record high of 2987114.50 USD Million in December 2021 and a record low of 64208 USD Million in February 1989.

In addition to this, the central bank Director also highlighted the importance of regulating the market. He believes that it was pertinent for regulators to track the space closely while engaging the private sector to boost their knowledge about the market.

He further said,

“We are part of the journey to get to improving digital payments using stablecoins.”

Philippines’ CBDC to roll out sooner than expected?

In addition to the stablecoin talk, Mhel Plabasan noted that the central bank would soon be rolling out its CBDC in a pilot phase. This was scheduled to take place by the end of this year.

Elaborating on the same, Plabasan stated,

“We are looking at open finance to further drive digital payments. We granted licenses to six digital banks. So there are a lot of initiatives right now to digitize payment in the Philippines, not necessarily related to the CBDC.”