The Treasury Department in the Philippines is considering partnering with the central bank. They want to widen the usage of digital money into government security sales.
After successfully getting 15 billion pesos ($271 million) through their first tokenized Treasury bonds, the Treasury is now looking into the good sides of blockchain technology. They used the Distributed Ledger Technology Registry for this.
The Bangko Sentral ng Pilipinas is experimenting with digital currency from the central bank (CBDC), used for major financial dealings. They aim to evaluate the technology’s benefits, hazards, and impact on policies.
At the moment, the distributed ledger technology (DLT) register, which shows where securities are registered, only handles half of the process of selling bonds. Deputy Treasurer Erwin Sta. Ana said in a Bloomberg interview on Monday:
We’re pushing the DLT’s capabilities to its limits. We plan to collaborate with Bangko Sentral on their central bank digital coin program. There’s a potential for blending our DLT Register and BSP’s CBDC.
Philippine Treasury Bonds Enter Tokenization Arena, Eyeing Extended Offerings
Tokenization is a growing area getting more notice from multiple governments and businesses. Last February, an amazing event happened in Hong Kong. They sold HK$800 million ($103 million) of first-time digital green bonds. And guess what? It was all done through Goldman Sachs’ GS DAP platform! This was the first green bond of its kind issued by a government using tokenization.
And guess what, else? According to Citigroup, tokenization is going to get huge. They’re saying 2030, it could be worth $5 trillion. It could cover many things, like bonds, property, and private equity.
Sta. In a recent interview, Ana hinted toward possible future sales of Philippine tokenized Treasury bonds. These may include larger tenors. “For starters, shorter securities are introduced. When the market and technology mature, we might look into longer tenors,” explained Ana.
The success of Monday’s tokenized Treasury bond offering could encourage more businesses to consider similar projects. Last year, the Union Bank of the Philippines paved the way by marketing digital bonds and enlisting them on the country’s bond exchange. There’s talk in Manila about widening the issuance of tokenized bonds for retail investors.
We’re at the beginning stages, and our focus will extend to retail. That’s where the majority of the impact of these reforms will be evident, Sta. Ana commented.
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