Bangko Sentral ng Pilipinas (BSP) will launch a wholesale central bank digital currency (CBDC) pilot project, coined CBDCPh, as part of its efforts to promote the stability of the country’s payment system.
- The central bank’s pilot will test the feasibility of using CBDCs for large-scale financial transactions “on a 24/7 basis across a limited number of financial institutions,” BSP governor Benjamin Dionko said at an annual policymakers’ roundtable.
- “Learnings from the pilot will be critical in constructing the BSP’s medium- to long-term roadmap for more advanced wholesale CBDC projects that shall further strengthen the Philippine payment system,” Diokno added.
- Around 20.1% of monthly retail transactions used digital payment methods in the Philippines by the end of 2020, up from 10% in 2018, according to the BSP.
- The central bank cautioned of “minimal perceived added value” of retail CBDCs in the Philippines because of the progress and usage of existing digital payment methods.
- Unlike retail CBDCs, wholesale CBDCs are restricted to banks and other financial institutions.
- A wholesale CBDC can help reduce friction in cross-border money transfers, equity securities payments and intraday liquidity facility, Diokno said.
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