Seeds of Wisdom RV and Economic Updates Monday Evening 1-13-25
Good Evening Dinar Recaps,
FILIPINO BANKS PLAN TO LAUNCH MULTI ISSUER STABLECOIN PHPX ON HEDERA DLT
Later this year several Filipino banks are planning to launch a multi bank peso stablecoin, PHPX, which will initially operate on the Hedera DLT network. The banks include the UnionBank of the Philippines, Rizal Commercial Banking, Cantilan Bank and the Rural Bank of Guinobatan.
Singapore startup Just Finance is the initiator, but the banks will have a significant role in the governance. Given a key goal is cross border payments, the plans include more than just a stablecoin. There’s a need to exchange stablecoins in different currencies.
UnionBank, or more specifically its fintech spin off UBX, has been involved in blockchain for years including managing a quasi stablecoin network, albeit in a closed loop system.
In 2018 it set up a token-based automated clearing house (ACH) to enable payments for rural and community banks that were not members of the national retail payment system (NRPS) to funnel them via UnionBank.
That system uses a permissioned version of Ethereum and the more-or-less invisible backend token is PHX, not to be confused with PHPX the planned new stablecoin.
While the ACH has served its purpose, it’s time to take the next step. “We need to create something that is publicly exchangeable, so that we can support use cases outside of our own closed loop ecosystem,” said John Januszczak, UBX CEO, during an interview with Ledger Insights. He also wants to support stablecoins beyond that created by UBX.
Hence, when David Inderias and Mikko Perez from Just Finance approached UBX with the concept for PHPX, Mr Januszczak was open to it.
While it’s not the only use case, cross border payments are top of the list, particularly for remittances.
Filipino stablecoin remittances
Inbound remittances from people working abroad are a critical source of funds in the Philippines. According to the World Bank, the country is the fourth largest recipient of remittances which totaled $40 billion in 2024, representing around 10% of the country’s GDP.
Some of the stablecoin goals are basic. “The speed of payments has not kept up with the speed of commerce,” said Mr Januszczak. “As the operator of a payments network, it’s not about the technology, it’s about that fundamental problem.”
He noted that the people doing the work abroad have limited control over how their hard earned cash is spent. They often send the money to someone in the Philippines who looks after the bills.
“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 Mr Januszczak.
“We want to open up the opportunity for people to contribute to insurance policies and wealth products from overseas. So not just vanilla, pedestrian remittances, but remittances that give back that control.”
For the banks involved, the stablecoins will often be abstracted in the backend, so the customer simply chooses to send $500 rather than being aware of the stablecoin details. The $500 is exchanged for PHPX or another stablecoin in the background. From there it can be deposited into a bank account, a G Cash wallet or for cash pickup at an over the counter location. Hence, banks will provide seamless on and off-ramping.
Ultimately, consumers could have direct access to PHPX, but that would be subject to regulator approval.
Stablecoins and FX
To enable cross border payments, part of the plan is to create a multi currency stablecoin exchange. Given cross border payments will involve swaps of foreign currency stablecoins in USD, SGD or JPY with PHPX, that requires liquidity providers who can earn a yield. It also will have to be regulatory compliant.
At launch it’s likely the banks or those implementing use cases will take on that role. But in a decentralized environment, that could open up over time, involving qualified investors as liquidity providers in the Philippines.
A safe PHPX stablecoin design
Turning to the stablecoin, Mr Inderias from Just Finance emphasized quality and compliance.
With a multi issuer token, the big question is what happens if a bank goes bust? Most of the stablecoin reserves will be held in segregated bank trust accounts which will hold government bonds, with a small cash balance for short term settlement. The trust accounts are ring-fenced rather than part of the general liability of the bank. Hence, if a bank fails, the stablecoin is bankrupt remote (provided the money hasn’t disappeared because of fraud). Given that Just Finance doesn’t hold the cash, the stablecoin should also be safe if it ran into trouble.
As a bank stablecoin, another challenge is compliance with Basel Committee crypto-asset rules. If stablecoins are classed with other cryptocurrencies (Group 2) that could get expensive for banks to hold them. In the latest Basel iteration, to qualify as a Group 1b (low risk) stablecoin the DLT network has to be permissioned, which is the reason for choosing the Hedera DLT as the initial network.
Another requirement to satisfy the Bangko Sentral ng Pilipinas (BSP) is for any coins the system interacts with to comply with the EU’s MiCAR regulations or regional equivalents.
Meanwhile, a key advantage of stablecoins over bank payments, is they don’t require interbank settlement. In the Philippines, the main National Retail Payment System (NRPS) limits payments to around $1,000 to manage risks. That’s because while the banks credit recipients almost immediately, the interbank settlement is not real time.
By contrast, the existing closed looped clearing house operated by UBX has been using blockchain for years, minting and burning tokens which are backed by reserves. Hence, it has already seen the benefits of stablecoin-style payments, where clearing and settlement don’t involve separate steps.
Getting to launch
The central bank is going to have the last say about when the solution goes live, with the earliest launch date between May and July this year.
Mr Inderias emphasized that the goal of PHPX isn’t purely for remittances. He also envisages larger cross border payments for trade and the potential domestic use of the stablecoin at point of sale (POS). But before that can even be considered, the first step is getting bank applications live.
“If and when we go to retail, we’ll do that in a measured way under the purview of the regulator,” he said.
@ Newshounds News™
Source: Ledger Insights
~~~~~~~~~
US BANKS CAN HOLD BITCOIN AND CRYPTO UNDER INCOMING TRUMP EXECUTIVE ORDER: REPORT
President-elect Trump will issue an executive order effectively allowing banks and financial institutions to hold Bitcoin (BTC) and crypto assets on behalf of their clients, according to a new report.
The incoming order will reverse a regulatory guideline that has shaped how financial institutions account for and custody digital assets, reports the Washington Post
“…Trump is expected to issue executive orders on the first day of his presidency that may address issues including “de-banking” and the repeal of a controversial crypto accounting policy requiring banks holding digital assets to count them as liabilities on the bank’s own balance sheet, according to a person involved with the conversations.”
The expected executive order is designed to reverse SAB 121, an SEC guideline that requires certain financial entities to list even the crypto assets they hold on behalf of customers as liabilities.
Crypto proponents say the guideline blocks financial institutions’ ability to enter the digital asset arena.
A bill aiming to eliminate SAB 121 recently passed both the House and the Senate, but President Biden vetoed the bill.
@ Newshounds News™
Source: DailyHodl
~~~~~~~~~
COINBASE SCORES ANOTHER WIN AGAINST 'ARBITRARY AND CAPRICIOUS' SEC ORDER
A panel of Third Circuit federal judges ruled the SEC must explain its lack of crypto rulemaking—but stopped short of ordering the agency to create such regulations.
A panel of federal appeals court judges in Philadelphia dealt another blow to the SEC’s crypto regime on Monday, emerging as the latest prominent court to question how the federal agency has navigated its regulation of digital assets.
The U.S. Court of Appeals for the Third Circuit ruled today in favor of Coinbase, which sued the SEC last year over the agency’s refusal to explicitly lay out its crypto policy. Instead of putting forth crypto-specific rules, the SEC has instead sporadically sued crypto firms over the last six-odd years in a pattern that has been disparagingly dubbed “regulation by enforcement.”
Today a three-judge panel, comprised of two Democrats and one Republican, ruled that the SEC’s dismissive response to Coinbase’s request for crypto-specific rulemaking was unacceptable.
“Because we believe the SEC’s order was conclusory and insufficiently reasoned, and thus arbitrary and capricious, we grant Coinbase’s petition in part and remand to the SEC for a more complete explanation,” today’s order reads.
The judges added that they declined, however, to force the SEC to create crypto-specific rules, as Coinbase had requested.
According to Judge Thomas Ambro, a Clinton-era Democrat who wrote Monday’s opinion, previous case law established that an agency like the SEC could only be forced to create rules against its will if an extreme delay in creating those rules “endangered human lives”—a requirement clearly not met by crypto-related regulations.
So the SEC doesn’t have to issue new crypto rules now, but it must explain to Coinbase in much greater detail why it has, thus far, refused to do so.
“Rather than force the agency to make a rule, we order it to explain its decision not to,” Judge Stephanos Bibas, a Republican appointed to the court by Donald Trump, wrote Monday in a concurring opinion. “Indeed, a rule may not prove necessary to solve the problems here; the agency could just state its position on crypto assets unequivocally.”
@ Newshounds News™
Source: Decrypt
~~~~~~~~~
CARDANO & RIPPLE TO PARTNER? ADA EYES RLUSD INTEGRATION
A cooperation that would see two of the industry’s most prominent networks team up, both Cardano (ADA) and Ripple are reportedly discussing a partnership that would include the latter’s recently launched Ripple USD (RLUSD) stablecoin. Indeed, the discussions were confirmed in a recent post to X (Foermly Twitter) by Cardano founder Charles Hoskinson.
The asset has had a rather slow start to the year despite immense promise. However, that is widely expected to turn around. Moreover, with both ADA and XRP projected to make headway in the coming months, a partnership could ensure their prices skyrocket together.
Charles Hoskinson Confirms Talk to Bring Cardano and Ripple Together
2025 may be set to be a big year for Cardano and Ripple, as both companies look to build off of a momentous final two months to last year. Moreover, the two sides are reportedly engaged in talks, according to the former’s founder. The discussion centers around the promising Ripple stablecoin debut that would bring about an RLUSD integration.
Charles Hoskinson went as far as to confirm that discussion was taking place. However, he did not elaborate on what exactly was discussed between both sides. Yet, if it comes to fruition, it would be a game-changer for ADA, the native token on the Cardano network.
The cryptocurrency has certainly struggled since the start of the year. Over the last seven days, ADA has fallen more than 16%, according to CoinMarketCap. Moreover, the asset’s 13% drop in the last 30 days has it trading under the $1 mark. However, the token is not expected to remain this year, as it is projected to have a monumental year ahead.
According to cryptocurrency price prediction platform CoinCodex, Cardano will retake the $1 mark in January and then some. Indeed, analysts project the token to end January with a high price of $1.8, providing a potential ROI of more than 101%.
That isn’t all, as the asset is expected to build off of that success. Specifically, the platform projects ADA to reach the $2 mark in February, reaching heights of $2.50, with a 174% potential jump, by the end of the year’s second month.
With $3.9 yearly highs projected, Ripple and RLUSD stablecoin integration would help the network reach these marks. Moreover, they could help them exceed them, rewriting the potential it had entering the year.
@ Newshounds News™
Source: Watcher Guru
~~~~~~~~~
Seeds of Wisdom Team RV Currency Facts Youtube and Rumble
Newshound's Podcast Link
Newshound's News Telegram Room Link
Q & A Classroom Link
Follow the Roadmap
Follow the Timeline
Seeds of Wisdom Team™ Website
Subscribe to Seeds of Wisdom Team™ Newsletter
Thank you Dinar Recaps