Philippine CBDC to be launched by the Central Bank "in the short term"

In an announcement, the governor of Bangko Sentral ng Pilipinas (BSP) - Central Bank of the Philippines - Benjamin E. Diokno, shared the country's plans for CBDCs.

Central Bank Digital Currencies (CBDCs) have been a rapidly developing digital asset class globally. Governments opposed to the use of cryptocurrencies are also interested in pursuing the development of CBDCs.

The Philippines joins other countries

Governor Diokno said that while interest in CBDC continues to grow around the world, the Philippines has also kept pace.

After the Bank began an exploratory study for the same in 2021, it analyzed different angles regarding the implementation of the CBDC. 

Investigating the nature and implication of CBDC on the entire financial system has also allowed the Central Bank to gain more knowledge on how to deal with it.

The assessment of the national payment system also provided valuable information on the most appropriate uses of digital currencies. Through the CBDC, the BSP will improve the efficiency, security and resilience of the national payment system.

Interpreting the same, Governor Diokno stated:

“As a next step, the BSP aims to launch in the near term, a pilot implementation of the CBDC which we call the CBDCPh Project. The project aims to build organizational capacity and practical knowledge of the key aspects of the CBDC that are relevant to a use case around the resolution of frictions in the national payment system ”.

Furthermore, by using CBDCs, the Philippines intends to improve the status of financial inclusion and make it more affordable and universally accessible. Diokno added:

“Cross-border money transfers are also another area of ​​financial inclusion where CBDCs can be very relevant. The costs of remittances continue to have a global average of 6,5% of the amount sent, well above the 3% target of the United Nations Sustainable Development Goals (SDGs). The interoperability of CBDCs between jurisdictions could provide substantial benefits for remittance-receiving economies, such as the Philippines, by reducing dependence on costly correspondent banking networks. "

Also acknowledging the technological and legal challenges of CBDC, Diokno said CBDCs could be an idea whose time has come.

Cryptocurrencies in the Philippines

Although cryptocurrencies are not considered legal tender in the country as in El Salvador, an entity can provide services, but must be registered with the BSP. 

With their CBDCPh, the Philippines will establish itself as an equally leader in technology and adoption. As it is, many large countries are on the verge of adopting CBDC themselves, including India, Japan, Zimbabwe, and Russia.