Philippine Banks to Launch PHPX Stablecoin on Hedera Network

Highlights:

• PHPX stablecoin aims to improve cross-border remittances and financial inclusion in the Philippines.
• Hedera DLT ensures compliance with international crypto-asset regulations for PHPX.
• PHPX reserves will be held in segregated trust accounts to ensure security.

Philippine banks are gearing up to release the PHPX stablecoin for cross-border transactions. The report indicates that the project involves Union Bank, Rizal Commercial Banking, Cantilan Bank, and Rural Bank of Guinobatan. Singapore-based Just Finance is implementing the project, with the banks taking up governance positions.

FILIPINO BANKS TO LAUNCH MULTI-BANK PESO STABLECOIN PHPX ON HEDERA DLT NETWORK: DETAILS…

– Multiple Filipino banks, including UnionBank, Rizal Commercial Banking, Cantilan Bank, and Rural Bank of Guinobatan, are set to launch the multi-bank peso stablecoin PHPX on the @Hedera… https://t.co/ZLNTUociw7 pic.twitter.com/XTC23ZxtD1

— BSCN (@BSCNews) January 10, 2025

The PHPX stablecoin will be based on Hedera decentralized ledger technology (DLT). This decision takes into account the legal requirements of the global crypto-asset market, including Basel rules and the EU’s MiCAR. The central bank, Bangko Sentral ng Pilipinas (BSP), will set the launch schedule, which is expected to happen between May and July 2025.

UnionBank partnered with Transational, a local e-commerce firm in 2018, through its fintech arm UBX for PHX, a quasi-stablecoin used for closed-loop payments. However, PHPX targets public exchangeability in order to allow for a wider range of applications.

Focus on Cross-Border Remittances

The Philippines is a remittance-dependent economy, with remittances reaching $40 billion in 2024. These funds constitute 10% of the GDP of the nation. As part of its offering, PHPX aims to reduce the time taken to send remittances through real-time transfers.

The users will also be able to have smooth backend operations. It allows them to transfer the funds without going through the process of understanding stablecoins. The PHPX will be converted into the local currency or transferred to bank accounts, mobile wallets or cash pick-up centers.

UBX CEO John Januszczak focused on direct payments during the discussion. He stressed allowing Filipinos overseas to make payments for things like tuition and insurance as they happen. Aside from the basic fund transfer, PHPX might also include cross-border payment for trade and other domestic transactions.

A multi issuer Philippine stablecoin on @hedera. I spoke with @LedgerInsights on how UBx continues to innovate with partners on distributed ledger technology to positively affect payments. The speed of payments has not kept up with the speed of commerce.

While we have been able… pic.twitter.com/XOqJwmp0zT

— John Januszczak (@johnjanuszczak) January 10, 2025

Secure and Compliant Design

The PHPX stablecoin will focus strongly on security measures. They will be deposited in segregated trust accounts supported by government securities. This guarantees that the bank will protect the money in case of a failure.

This is because of Hedera’s permissioned DLT and the categorization of PHPX as a low-risk crypto asset under the Basel norms. Liquidity providers will help in the exchange of PHPX for other stablecoins such as USD, SGD and JPY. These providers will get returns, and banks will initially manage the process.

The stablecoin will eliminate the need for cross-border settlements. Standard payment methods may also impose restrictions on transaction amounts due to risk management issues. PHPX eliminates these restrictions through real-time clearing and settlement, thus making the transfer faster and more effective.

Future Prospects for PHPX Stablecoin

PHPX has potential use cases beyond remittances. It could expand to larger cross-border transactions and domestic point-of-sale payments. However, regulatory approval will guide any move toward retail adoption.

For now, the focus remains on banking applications and cross-border payments. The collaboration between banks and Just Finance aims to modernize financial services in the Philippines. By leveraging Hedera’s technology, PHPX seeks to enhance financial inclusion and streamline transactions.