Mhel Plabasan, a top executive of Bangko Sentral ng Pilipinas, said that the bank is strongly in favor of stablecoins because they can help the monetary system as well as ensure “affordable” and faster cross-border transactions. A pilot version of the CBDC will also be launched by the organization before 2022.
It is important to note that the central banks in Israel, Norway and Sweden worked together with the Bank for International Settlements, (BIS), to examine how CBDCs could participate in transnational payments.
The Philippines could benefit from stablecoins to improve its financial well-being
Mhel Plabasan, Director at Forkast’s Crypto Rising: CBDCs & Stablecoins : The Asia Perspective, said that stablecoins could help the country’s payment network during a panel discussion:
He highlighted the large number of Filipinos working abroad and argued that stablecoins could be a cost-effective way for them to send money to their families.
“We believe it has the potential for revolutionizing both domestic and cross border payment. It is more affordable, quicker, and even possible to use stablecoins to make cross border remittances efficient.
Estimates suggest that nearly 12 million Filipinos live in countries other than their home country. They are the most numerous in the USA, with more than four million.
Plabasan, despite advocating the adoption of stablecoins argued that regulators should closely watch new technology.
“That’s why we need to engage the private sector constantly and learn together. He said that we are all part of the process to improve digital payments with stablecoins.
Further, the executive revealed that the bank will soon launch its central banking digital currency (CBDC), in a pilot phase. The authorities called Project CBDCPh. It should be completed by the end of the year.
When talking about CBDCs, it’s worth mentioning the cooperative effort between the Bank of International Settlements (BoIS) and the central banks of Israel and Norway. This is known as “Project Icebreaker.”
The entities teamed up to examine how financial instruments can be used to settle international retail and remittance transactions. The team will examine whether CBDCs allow for faster and cheaper transactions than traditional methods.
The project will continue until the end of 2022. A final report with results will be available in the first quarter next year. Beju Shah, Head of the BIS Innovation Hub Nordic Centre, commented on the matter.
“This experiment is the first of its kind and will explore relevant policy questions and dig deeper into technology, architecture and design choices. These lessons will prove invaluable to central banks when they consider implementing CBDCs in cross-border payments.
Mithra Sundberg, a senior executive at the Swedish central banking, stated that Sweden joined the project to increase its e-krona efforts. The authorities of Sweden have been active in the CBDC arena. The Riksbank stated last year that it should have its digital currency ready by 2026.