The Philippine banks plan to introduce a new digital currency called PHPX, which will operate on the Hedera blockchain. This move aims to streamline cross-border transactions and remittances for easier and more efficient money transfers.
Multiple Philippine banks are preparing to debut a new stablecoin named PHPX, which aims to simplify cross-border transactions. This initiative will initially operate on Hedera’s Distributed Ledger Technology (DLT) platform. The participating banks include Rizal Commercial Banking Corporation, the Rural Bank of Guinobatan, Cantilan Bank, and UnionBank. The project is spearheaded by a Singapore-based startup called Just Finance, although the banks will play significant roles in its management.
PHPX, a pioneer in cryptocurrency development, aims to streamline cross-border transactions as a key objective. This digital currency will facilitate the conversion of other stable coins such as USD, SGD, and JPY into its own stablecoin. To establish a robust multi-currency exchange platform, it requires liquidity providers who can help maintain smooth operations. By providing liquidity, these contributors can potentially earn returns on their investment. Initially, banks will likely act as the primary liquidity providers, but other entities may join this venture in the future.
For quite some time now, the fintech division of UnionBank, UBX, has relied on blockchain technology. In 2018, UBX launched a token-based payment system catering to rural banks, employing an Ethereum-like platform. The token in this system is PHX, not PHPX. With the increasing global demand for a publicly traded stablecoin, as indicated by UBX CEO John Januszczak, it’s clear that such a coin could serve multiple purposes beyond UnionBank’s system.
PHPX Stablecoin to Improve Remittances for Filipinos
PHPX plays a significant role in remittances, particularly for the Philippines. Many Filipinos work overseas and send funds back home. In 2024, the Philippines received approximately $40 billion through remittances. However, sending these funds often involves time and expense. With PHPX, transactions will be expedited and costs reduced. Whether it’s paying bills, school fees, or financing insurance or investment products, Filipinos can handle all their needs using PHPX.
While remittances serve as the primary purpose, the PHPX could potentially facilitate larger payments, such as those involved in international trade. However, it’s the Central Bank of the Philippines that will make the decision on when the stablecoin becomes operational. The planned launch date falls between May and July 2025.
Recently, the central bank completed trials for a digital version of its currency specifically designed for use among banks, known as a central bank digital currency (CBDC). The initiative, called Project Agila, aims to enhance interbank transactions and financial security. Furthermore, it’s possible that the future of digital payments in the Philippines may incorporate this CBDC.
Beyond these advancements, PHPX and Central Bank Digital Currency (CBDC) are crucial steps towards enhancing the Filipino payment infrastructure. The CBDC is designed to strengthen the local financial system, whereas PHPX enables quicker international transactions.
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2025-01-13 10:51