Following the global settlement of peg.PHP, we have initiated a strategic restructuring of the Philippine Peso stablecoin by replacing peg.PHP backed by BTS with stable.PHP which uses BitUSD as the collateral backing.
To kickstart the markets, we have seeded 10,000 BitUSD to back stable.PHP and are looking at adding another 50,000 BitUSD soon when our next iteration of the Bitspark platform is live with withdrawal to PHP cash via web in addition to the API. Currently, the API is where our major PHP customers integrate with us.
Benefits of using BitUSD as collateral backing for stable.PHP
Shorters should be very interested in this development as emerging market currencies almost always depreciate against the USD in the long term and therefore creating stable.PHP with BitUSD is likely to be a profitable trade, just about always. This is something we are constructing a marketing campaign for, targeting the large financial and FX industry in our home markets in Asia.
We think using BitUSD as collateral backing will greatly increase adoption of stable.PHP for the following reasons:
Much simpler price feeds as USD/PHP is already a major global currency pair and there are plenty of destinations to get this information. We don’t need formulas to determine the price feed for the blockchain which eliminates the percentage of volatility between sources.
Less volatile asset backing can reduce MCR a lot and increase the amount of circulating supply of PHP and thereby increase liquidity.
Less risky for shorters to create the asset, the movements in USD/PHP is nowhere near as much as in the BTS/PHP markets.
PHP is an exotic currency and like all exotic currencies they’re always heading in one direction against the USD: to zero. As a shorter this is an excellent opportunity to make money as the collateral will almost certainly rise against the asset, taking a short position can be very profitable and this is something that’s very difficult to do in the traditional finance world.
What’s next?
The benefits of using BitUSD as collateral backing can be replicated across multiple exotic currencies. For that reason, we will be using the same structure going forward with our next stablecoin releases including Indonesian Rupiah (IDR), Vietnamese Dong (VND) and South African Rand (ZAR) to provide traders with the same unique market opportunities that now exist for the newly minted stable.PHP coin.