The Bureau of the Treasury in the Philippines is contemplating a collaboration with the central bank to incorporate digital currency in the issuance of government securities, marking a significant exploration into blockchain technology.
On Monday, the Southeast Asian nation successfully raised 15 billion pesos ($271 million) through its inaugural tokenized Treasury bonds, leveraging the Distributed Ledger Technology Registry based on blockchain.
Deputy Treasurer Erwin Sta. Ana stated in a phone interview, “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.”
The Bangko Sentral ng Pilipinas has been actively experimenting with the use of central bank digital currency (CBDC) for large-value financial transactions, assessing the benefits, risks, and policy implications of this technology.
Currently, the DLT registry addresses only half of the bond sale process by indicating the location where securities are registered. The National Registry of Scripless Securities (NRoSS) handles the security leg, allowing participants to monitor the cash leg of securities transactions settled on the Philippine Payment and Settlement System (PhilPaSS).
Erwin Sta. Ana highlighted that while tokenization is evolving, it has piqued the interest of governments and companies worldwide. The Philippines’ move follows Hong Kong’s issuance of inaugural digital green bonds in February, and Citigroup estimates the tokenization market could reach $5 trillion by 2030.
Sta. Ana hinted at the possibility of future tokenized Treasury bond sales involving longer tenors as the market and technology mature. The recent success of the one-year tokenized Treasury bond deal could potentially pave the way for more companies to explore similar initiatives. The Philippines also aims to extend the sale of tokenized bonds to include retail investors, marking a significant step in the adoption of digital assets and reforms in the financial sector.
