The Bangko Sentral ng Pilipinas (BSP) sets its sights on introducing a wholesale central bank digital currency (CBDC) within the next few years, signaling a significant shift in the country's financial landscape.
Governor Eli Remolona Jr. of the BSP unveils plans to develop a CBDC, aiming to modernize the country's payment and settlement systems. In a departure from blockchain technology, the BSP opts for the Payment and Settlement System, owned by the central bank, to underpin the CBDC project.
Remolona emphasizes the decision to focus on a wholesale CBDC, mediated by banks, citing concerns over potential issues with retail CBDCs. By limiting the CBDC to wholesale transactions, the BSP aims to mitigate risks such as disintermediation and bank runs during financial stress.
A Digital Complement to Cash
Drawing inspiration from countries like Sweden and China, which have embraced CBDCs, Remolona sees the Philippines replicating their success. The CBDC is envisioned as a digital complement to cash and a competitor to cryptocurrencies, offering a modernized approach to financial transactions.
Timeline and Regulation
Governor Remolona asserts that the CBDC will materialize within his term, with a potential rollout within the next two years. Meanwhile, the Philippines maintains a cautious stance on the crypto industry, evidenced by the SEC's ban on unregistered activity by platforms like Binance, as the country seeks to safeguard its local market.