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BSP Director: Stablecoins Can Make Payments More Efficient

BSP Director: Stablecoins Can Make Payments More Efficient

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Surgery by Nathaniel Cajuday

According to Bangko Sentral ng Pilipinas (BSP) head Mhel Plabasan, the central bank sees stablecoins as a credible solution for more efficient payment transactions in the country.

Speaking during a panel discussion at Forkast “Crypto Rising: CBDCs & Stablecoins: The Asia Perspective” Livestream, Plabasan stated that they are integrating a flexible approach to the said coin after testing the use of stablecoins as a payment method.

“We’ve seen that it really has the potential to revolutionize both domestic and cross-border payments for cheaper, faster, and even the ability to use stablecoins to power cross-border remittances.” Plabasan said.

Stablecoins are a type of cryptocurrency that is pegged to Fiat or can also be gold in a 1:1 ratio. It is categorized into three: fiat-backed, crypto-backed and algorithmic.

Last month, Cebu City Vice Mayor Raymond Alvin Garcia revealed that the city has partnered with C Pass Inc. to develop C-Peso, a stablecoin that aims to promote cash-to-cash payments in the city. According to him, the coin has entered the third stage of the Virtual Asset Service Providers registration process. (Read more: C-Pass Inc Signs MoU to View Crypto Coin C-Peso in Cebu City)

In a recent index report by Chainalysis, the Philippines ranked 2nd only 0.25 points behind Vietnam in crypto adoption among 154 countries surveyed by measuring its key trading metrics through centralized exchanges, DeFi protocols and peer-to-peer trading volumes. (Read more: PH Ranks 2nd in Chainalysis Crypto Adoption Report)

Although, according to Metamask’s Crypto Wallet Year 2022 Q1 report, the Philippines also has the third highest number of wallet users – 3.57 million. (Read more: Philippines ranked third in number of MetaMask users in Q2 2022)

However, despite all this rapid adoption of cryptocurrency and the technology behind it, there are still no clear laws to address some of its loopholes that can be exploited by fraudsters and digital thieves. In fact, the Banko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) are pushing for legislation to create precise rules and regulations for digital assets and digital space.

Contrary to the BSP’s current view, Governor Felipe Medalla ignored cryptocurrency last June, saying he was not eager to regulate it and calling it a “greater fool’s theory.” (Read more: Incoming BSP governor rejects crypto, doesn’t want to regulate)

On the other hand, as the central bank now sees stablecoins as a sustainable form of payment, the annual economic report of the Bank for International Settlements (BIS) indicated that central bank digital currency (CBDC), not cryptocurrency, is the future of the world’s monetary systems.

Fortunately, the BSP has already launched its own CBDC. In May, the central bank began involving several banks and financial institutions in the pilot testing of the CBDC by the last quarter of the year.

The launch of the CBDC was announced last March and continues the wholesale CBDC pilot project as part of its aim to promote stability in the country’s payments system. (Read more: BSP CBDC Digital Currency Initiative Planned for Q4 2022)

In addition, just this month, the central bank and the Monetary Board (MB), the BSP’s decision-making body, approved the Test and Learn Framework, or Regulatory Sandbox.

It allows institutions regulated by the central bank to test and offer some innovative products in a controlled environment. (Read more: Bangko Sentral OKs Regulatory Sandbox for Banks)

This article was published on BitPinas: BSP Moderator: Stablecoins can make payments more efficient

Disclaimer: BitPinas articles and its external content are no financial advice. The team delivers independent, unbiased news to provide information on Philippine crypto and beyond.

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