In 2019, Filipino lender UnionBank launched PHX, the country’s first stablecoin targeting users in rural areas, but it failed to take off as expected. Smart Citi Teknologi hopes its stablecoin fares better as it targets the unbanked and massive remittance sectors.
Smart Citi partnered with Hong Kong-based Xtreme Business Enterprises (XBE) on the stablecoin project, local media reports. The two firms believe the stablecoin will “change and transform the way financial transactions are being done in the Philippines.”
With digital assets being criticized as currency for their price volatility, stablecoins have emerged as the most viable solution. However, unlike decentralized digital assets like Bitcoin, stablecoins involve an element of trust in the issuer. This trust hasn’t always been repaid, with some like Tether and Binance proven not to have backed the stablecoins as advertised. Those that have relied on code, such as Terra’s UST, have collapsed even more spectacularly.
The two companies say they can avoid the stablecoin loopholes.
“What we normally do when we look at stablecoins is that we ensure that the coins are being backed by solid assets which can maintain the value of the stablecoin itself and this could be in the form of government debts or in the form of cash deposits in very reputable banks,” stated XBE CEO Julian So.
The two firms target unbanked Filipinos with stablecoins. Data shows that 41 million Filipinos are unbanked, equating to just over half of the adult population.
They also plan to tap into the remittance industry. The Philippines is the world’s fourth-largest remittance destination after India, Mexico, and China. However, remittances are still costly and inaccessible, especially for those who need them most.
“Imagine if you have peer-to-peer transactions enabled, where you’re no longer reliant on these mechanisms, you will automatically be bringing into the Philippines 10% of additional spending power and immediately that means more jobs and more stimulus,” XBE’s Joshua Chu told the media.
The Philippines is already a global leader in Bitcoin adoption. With the lowest blockchain fees and unbounded scaling, BSV Blockchain offers Filipinos the most secure, convenient, cost-effective, and regulatory-compliant way to receive remittances from any part of the world.
nChain is leading the BSV blockchain ecosystem’s focus and investment in the Philippines. The enterprise blockchain leader launched the Block Dojo Philippines in March to incubate blockchain-powered startups in Southeast Asia and has been organizing meetups to foster adoption in the country.
Watch: nChain eyes creating efficient processes for the Philippines
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