Philippines’ tokenized-asset market to expand further

THE PHILIPPINES could become a “tokenized-first” capital market amid the rising adoption of digital wallets, with assets having the potential to reach $60 billion by 2030.

A white paper by the Philippine Digital Asset Exchange (PDAX), Saison Capital, and Onigiri Capital titled “Project Bayani: The Philippines’ Asset Tokenization Opportunity” said the country’s tokenized-asset market could hit $60 billion across government bonds, mutual funds, equities, and other investment assets by 2030.

Nichel Merlimichael O. Gaba, founder and chief executive officer of PDAX, said the Philippines has a “unique advantage” as blockchain wallets are already mainstream here.

“We’re not starting from scratch. The infrastructure to deliver tokenized assets to millions of Filipinos already exists in their pockets. Our focus now is to connect that infrastructure to real, regulated financial products,” he said.

According to the report, 14% of Filipinos already own cryptocurrencies. Meanwhile, less than 5% own traditional investment products like stocks, bonds, or mutual funds.

“Additionally, major mobile wallets like GCash, PDAX, Maya, and Coins.ph have embedded blockchain-enabled wallets that already allow users to hold cryptocurrencies and tokenized investment products, allowing for easy distribution without new distribution rails or legacy overhauls. With this, the report believes that the first investment product most Filipinos will own will be in tokenized form,” PDAX said.

The bulk of the tokenization opportunity is led by $26 billion in public equities, followed by $24 billion in government bonds, $6 billion in mutual funds, and $4 billion in other assets.

The total represents approximately 5% of the total value of deposits and securities by 2030, considering the number of bondholders nearly doubled following the launch of GBonds, it said.

National Treasurer Sharon P. Almanza said investments in tokenized form are now at nearly P1 billion.

“That’s why GBonds is really revolutionary because those investors that are constrained by that limitation are now able to participate in our RTB (retail Treasury bonds) and even in our regular auction, which is the Treasury bills. So, that access is very important because we are able to reach out to all users,” she said.

She said the government is in talks with banks to offer government securities via their own mobile platforms as they hope to further democratize access to financial instruments. — A.R.A. Inosante