The Philippines’ Bureau of the Treasury is actively considering a strategic collaboration with the country’s central bank to introduce digital currency in the sale of government securities, embracing the potential advantages offered by blockchain technology.
Meanwhile, the Southeast Asian nation recently achieved a significant milestone by successfully raising 15 billion pesos ($271 million) through its first-ever issuance of tokenized Treasury bonds.
This innovative approach leveraged the blockchain-based Distributed Ledger Technology (DLT) Registry.
Exploration of CBDC for Sovereign Bond Sales
The Bangko Sentral ng Pilipinas has been actively experimenting with central bank digital currency (CBDC) for substantial financial transactions, carefully assessing the technology’s benefits, risks, and broader policy implications.
Apparently the existing DLT registry, responsible for indicating the location of securities registration, currently covers only half of the bond sale process.
Further in an interview Deputy Treasurer Erwin Sta. Ana mentioned that;
“We’re testing the capability of the DLT. We are looking to collaborate with the Bangko Sentral in their central bank digital coin program. There’s room for integration between our DLT Registry and the BSP’s CBDC.”
Embracing the Tokenization Trend
Tokenization is a growing sector gaining attention from various governments and companies. In February, Hong Kong achieved a milestone by selling HK$800 million ($103 million) in inaugural digital green bonds through Goldman Sachs’ GS DAP platform, marking the world’s first tokenized green bond issued by a government.
Earlier, Citigroup has estimated the tokenization market could reach $5 trillion by 2030, covering assets such as bonds, property, and private equity.
Sta. Ana shared insights into the future, mentioning that upcoming sales of Philippine tokenized Treasury bonds might involve larger tenors. As the market and technology mature, there are plans to explore longer tenors. This successful tokenized Treasury bond issuance is expected to inspire more companies, building on the precedent set by the Union Bank of the Philippines last year.
Meanwhile, this bold initiative is not only a testament to the Philippines’ commitment to technological advancements but also positions the nation at the forefront of the global trend toward digital innovation in the financial sector.
