Philippine Government Bill Could Pave Way for Bitcoin-Backed Money

A member of the House of Representatives of the Philippines has introduced a bill that would seek to create a government-backed "e-peso" that would serve as an official medium of exchange for domestic online payments.

Introduced as part of the E-Peso Act of 2014, the payments tool would be considered legal tender for debt, taxes and goods and services, according to a report by The Philippine Star.

Most notable for the bitcoin industry is that the current version of the bill would mandate that Bangko Sentral ng Pilipinas (BSP), the country's central bank, study bitcoin and its related technological applications when determining how it will build the proposed platform.

The bill states:

“The BSP will also choose a system that uses peer-to-peer processing of the log chain and shall exert its utmost to leverage existing hardware being used by the other leading cryptocurrencies such as bitcoin."

Introduced by Pangasinan Representative Kimi Cojuangco, the law would also make the e-peso available at all domestic bank branches. It would further limit the total number of e-pesos in circulation issued in the first two years of operation to P1 billion.

Boon for bitcoin in Philippines

While it is unclear if the bill will gain any traction in government, the fact that bitcoin has been mentioned as a potential solution to the country's payment problems marks a step forward for the technology in what is increasingly being viewed as a key market.

Ron Hose, CEO of local bitcoin exchange and processing provider Coins.ph, told CoinDesk he believes that the e-peso offering could boost bitcoin's credibility domestically, and that both bitcoin and the e-peso could co-exist in the market.

Hose told CoinDesk:

"The borderless nature of bitcoin will augment the e-peso perfectly. The e-peso could help provide a locally stable currency, while bitcoin will provide connectivity to global merchants and financial services."

Further, Hose promised Coins.ph would do everything it could to encourage the country's Congress to consider the measure.

"This is an incredible opportunity for the Philippines financial system to leapfrog even the most advanced economies, and it will have tremendous impact on improving the financial inclusion landscape here," Hose said. "It’s going to set the Philippines lightyears ahead of other countries."

CoinDesk has reached out to Cojuangco, the lawmaker who introduced the bill, but at press time had not received a response.

Emerging markets seek payment solutions

Though still in its early stages, the emergence of bitcoin as part of the country's national payments conversation starkly contrasts approaches taken by other governments seeking to adopt similar initiatives.

For example, this July, the South American nation of Ecuador announced that it would introduce its own digital money. However, in the process it sought to effectively ban decentralized alternatives such as bitcoin and other digital currencies.

There, local bitcoin advocates have told CoinDesk that while they are seeking to engage lawmakers about the potential benefits of bitcoin, such conversations have not yet lead to any formal discussions about larger changes in policy.

Likewise, Peso Digital, a Mexico-based project, is seeking to encourage the country's central bank to explore block chain technology, though discussions are allegedly in very early and exploratory stages.

Images via saiko3p / Shutterstock.com; Wikipedia