An official of the Bangko Sentral ng Pilipinas’ (BSP) has revealed more details about the central bank’s plans for to study wholesale central bank digital currency (wCBDC), according to a local press report.
BSP deputy governor for payments and currency management sector Mamerto Tangonan told a press conference on March 6 that the wCBDC pilot project, called Project Agila, would be completed by the end of this year. Tangonan called the pilot project a “learning exercise.” Tangonan said:
“We envision a Philippines where access to securities and similar investment instruments can be democratized, meaning they could be purchased for smaller issue sizes and much much lower fees so that any Juan or Maria cannot only dream but actually own securities.”
Six domestic banks — BDO Unibank, China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines and Maya Philippines — are taking part in pilot along with the BSP. The project is using the wCBDC to transfer funds among the banks.
“But we also like to see if this wholesale CBDC can be used for higher value-adding services like securities settlement,” Tangonan added.
BSP governor Eli Remolona told the press in February that the central bank was only considering a wCBDC, due to concerns about bank disintermediation and similar issues associated with the potential issuance of a retail CBDC. The CBDC would not operate on a blockchain, he added.
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The Philippines first announced its interest in issuing a CBDC in 2020. The BSP Monetary Board noted the bank’s positive initial assessment of a wCBDC and planned pilot tests beginning in 2022. It was known at that time as Project CBDCPh. The launch of a pilot project was announced in April 2022.
The Philippines took part in a pilot study in 2023 involving the Digital Dollar Project, Western Union and BDO Unibank to study retail CBDC for use in remittances. They found that the proposed CBDC would lower costs and increase transparency and competition. The project was challenged to improve the speed of transactions, however, since most remittances come into the Philippines after working hours.
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