Philippine congresswoman Kimi Cojuangco has filed House Bill no. 4914, or the Electronic Peso or E-Peso Act of 2014, the objective of which is to create digital legal tender that can be used as cash, as opposed to credit cards, for the purchase of goods and services on the Internet.
Although digital in nature, E-Pesos are to be valued, minted, circulated, and retired by the Bangko Sentral ng Pilipinas (BSP; Philippine Central Bank) just like physical money. Authenticity verification shall be through a transaction ledger system called a log chain, with each newly minted E-Peso being assigned its own log chain to prevent multiple bookings of a single transaction.
As legal tender, the E-Peso cannot be refused by government and business establishments as a valid mode of payment for goods, services, debts, and taxes. In addition, all business establishments in the country shall be required to exclusively use E-Peso denominations in all their official e-payment and money transfer systems.
All Philippine-based banks will also be required to have E-Pesos as 0.5% of their total cash on hand. The E-Peso may also be used for international transactions, though the process will involve currency exchange.
“The E-Peso, in convenient general circulation, will be an additional path to boost the country’s transaction velocity, economic growth rate, and that it will also serve to be a major convenience for all our people,” Cojuangco says.
Inspired by Bitcoin
For the technology to be used in the minting and transfer of E-Pesos, the BSP shall study “the technology of bitcoin and post-bitcoin cryptocurrencies,” the house bill says.
Bitcoin is a forerunner of digital currencies. Like regular money, it can be transferred directly from person to person without having to go through third-party entities like Paypal. This eradicates transaction fees for business payments, and it minimizes transaction fees for physical cash withdrawals.
Unlike credit card payments, Bitcoin payments can be accepted by establishments without them having to install complex digital and physical infrastructure. Web apps for accepting digital currencies can be downloaded online and installed in any Android or IOS device.
Since digital currencies such as Bitcoin are not bank accounts or credit card accounts, they do not require a maintaining balance or annual fee.
Reloading of digital currency accounts can be done through money order and direct bank transfers. This could also inject new life into the Philippine postal system, which already offers electronic money order services for safe and convenient money transfers even from overseas.
The major bitcoin exchanges in the Philippines are coins.ph, buybitcoin.ph, coinxchange.ph and coinage.ph.