The Philippines Treasury Explores Digital Currency For Bonds
The Bureau of the Treasury in the Philippines is considering a collaboration with the central bank to extend the use of digital currency to the sale of government securities. The Treasury is exploring the benefits of blockchain technology after raising 15 billion pesos ($271 million) through its inaugural tokenized Treasury bonds. This success stems from utilizing the Distributed Ledger Technology Registry.
Using CBDC For Selling Sovereign Bonds
The Bangko Sentral ng Pilipinas has been conducting experiments with central bank digital currency (CBDC) for significant financial transactions. Their goal is to assess the technology’s advantages, risks, and policy implications. However, the current distributed ledger technology (DLT) registry only covers half of the bond sale process. In an interview with Bloomberg on Monday, Deputy Treasurer Erwin Sta. Ana said, “We’re testing the capability of the DLT. We are looking to collaborate with the Bangko Sentral in their central bank digital coin program.”
The Tokenization Trend
Tokenization is an emerging sector that has gained significant attention from various governments and companies. In addition, the tokenization market has the potential to reach $5 trillion by 2030. Sta. Ana also mentioned that future sales of Philippine tokenized Treasury bonds might involve larger tenors. The recent tokenized Treasury bond deal on Monday could serve as an inspiration for more companies to explore similar ventures. Manila is now considering expanding the issuance of tokenized bonds to encompass retail investors. “We are just starting and we will look to further take this on the retail side,” Sta. Ana said.
Hot Take
The move by the Philippines treasury showcases a growing trend of digital currency implementation in traditional financial transactions, with significant positive effects on financial markets, technology, and globally accepted payment systems. As the success of these initiatives becomes more evident, expect to see a wider embrace of digital currency for a range of financial services, particularly in bond issuance and trading.
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