China-based crypto mining giant Huaren Capital is looking to further expand its business in the Philippines Islands. As reported by The Inquirer, Huaren plans to launch “Digital Peso”, a digitized version of fiat Philippino Peso, by the first half of 2019. The publication notes that digital peso will not only help “overseas Filipino workers (OFWs) but also Chinese nationals” working in the Philippines.
Hence, it is clear that Huaren Capital is working to establish a two-way remittance corridor between the Phillippines and China. As per the report, each “digital Peso” will be pegged to the fiat in 1:1 ratio. Huaren Capital president Jeff Wang confirmed the report during a press meeting last Wednesday. He said that his company is in talks with potential banking partners, refusing to name any. However, Wang said that they are also talking to the Phillippines central bank – Bangko Sentral ng Pilipinas (BSP) – regarding the project.
Reducing the International Remittance Fees
The Phillippines is currently the world’s third-largest remittance receiving country. According to the World Bank, the country has $33 billion of remittance inflow every year. Wang said that the “Digital Peso” project would aim at reducing friction and international remittance fees. Wang explained (though a translator):
“In China, they have electronic payments systems like Alipay and WeChat Pay, so transfer of funds is very easy. We understand in the Philippines, many Filipino citizens don’t have a bank account, and when they transfer funds from one country to another or from one place to another, there’s always a high remittance fee incurred, so we are working toward reducing that kind of cost for the average Filipino citizen”.
Wang also said that the opportunities would be open to both. This includes Chinese workers working the Phillippines and overseas Filipino workers (OFWs).
Getting the Regulatory Approval
Huaren Capital President said that the company is currently seeking a regulatory approval from the central bank. By early 2019, the company expects to form partnerships with local banks. As a result, it will proceed for a full-fledged launch by June 2019.
“The Philippines regards blockchain innovation as a national strategy, providing a large number of preferential policies and services to related companies, and solving the regulatory problems faced by the blockchain industry,” Wang explained.
Describing Phillippines as “a very open and dynamic economy”, Wang is quite optimistic about the growth of its market. The pilot project for “Digital Peso” within the Cagayan Special Economic Zone (SEZ). The SEZ is currently operated by state-run Cagayan Economic Zone Authority (Ceza).
“I believe the technology is growing very fast, very rapidly in the Philippines. And e-commerce is growing and will be growing even faster with all these cryptocurrency technologies. We hope that this will bring the Philippines to the forefront of e-commerce around the world,” Wang said.
Huaren Capital recently established its headquarters in the Phillippines’ capital city of Manila. This was done soon after the recent visit of Chinese President Xi Jin Ping to the country.
“And after the visit of Chinese President Xi Jinping, the two countries are building collaborations on many fronts and I think this is a good opportunity and a good moment for us to launch this in the Philippines,” Wang added.