Stablecoin revolution: Philippine banks embrace digital currency

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In 2024, CoinGeek reported that East Asia had received over $400 billion in value via stablecoins and other digital currencies between the summer of 2023 and 2024.

It’s perhaps no surprise that Southeast Asia keeps pace, as reports show the Philippines is one location where major banks are launching a multi-issuer stablecoin.

The Peso stablecoin, PHPX, is a project between UnionBank’s UBX, Rizal Commercial Banking Corporation (RCBC), Cantilan Bank, and the Rural Bank of Guinobatan. It will initially operate on the Hedera network behind the scenes without users interacting with it directly.

The main aim of the PHPX stablecoin is to enable overseas Filipino workers to send remittances faster and with lower fees. Currently, Pinoys working abroad send a whopping $40 billion annually to the country; remittances count for 10% of GDP.

“We want Filipinos that are earning money in the US (or elsewhere) to be able to pay their kids’ school tuition directly from the United States (and) for that payment to be affected in real time,” said John Januszczak, UBX CEO.

Electronic cash, but with stablecoins

The digital PHPX stablecoin is one of many similar projects in the works across the world. After almost a decade, banks, businesses, and nation-states are waking up to how blockchain technology is all about payments and how it can facilitate faster, cheaper payments across the globe.

While huge institutions like the Bank for International Settlements (BIS) have worked on projects like mBridge to realize these benefits for central banks and financial institutions, we’re increasingly seeing retail-focused projects.

While it took a while, we’re finally beginning to see digital currencies serve their original purpose. There are still a few steps before everything comes together, such as the realization that using different blockchains for each coin fragments liquidity and leads to interoperability issues, but these insights will come in time.

For now, it’s encouraging to see banks and fintech firms utilize the technology to improve people’s lives. With the average Filipino making roughly $339 per month, even small reductions in remittance fees matter a lot. While the 10,000 transactions per second Hedera can process won’t cut it in the long run, it’s a much better option for the PHPX stablecoin than Ethereum or Solana.

Could the developing world ‘leapfrog’ everyone else?

While many in North America and Europe are only interested in digital currencies to trade for fiat currency gains, projects like the PHPX stablecoin show that blockchain and DLT can create real value in the marketplace.

In regions like Southeast Asia, Africa, and Latin America, there tends to be a much greater focus on utility and exploring what the technology can do to improve people’s lives. This is reflected in how, as well as being a global stablecoin hub, Southeast Asia is also a hotspot for play-to-earn games. Utilizing micropayments may not matter to an American or European, but to players in developing countries, they can be an additional source of income and a way to play games that would otherwise be too expensive to buy or subscribe to.

This embrace of digital currencies and blockchain tech for real-world use cases can also be seen in the stark differences in attitudes toward central bank digital currencies (CBDCs) in different regions. People in Nigeria and Indonesia are much more open to how CBDCs could benefit them, whereas Westerners tend to be skeptical and concerned about privacy and political freedoms.

Could this embrace of blockchain utility lead the developing world to leapfrog the developed world, which seems to be happy to rest on its laurels? It would be a mistake to underestimate these regions full of young, hardworking people eager to build the future. After all, while Brits and Canadians still use physical debit cards and many in the older generations refuse to embrace Internet banking, China has pulled ahead by a significant margin in many areas, especially payments.

In China, they pay for things using the palm of their hand😳 pic.twitter.com/NspN8k6BFx

— Out of Context Human Race (@NoContextHumans) November 23, 2024

Anyone, anywhere, whether they be an individual, business, or government, must embrace blockchain technology, digital currencies, tokenized assets, and associated technology now. The focus must be on how they can deliver value to customers and citizens.

With blockchains like BSV enabling one million transactions per second for fractions of a cent, there’s never been a better time to build the future on scalable blockchain tech!

Watch: Achieving financial inclusivity in the Philippines