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The Bangko Sentral ng Pilipinas (BSP) intends to finalize a CBDC pilot by the year’s conclusion, as reported by local media.
During a press briefing on Wednesday, Central Bank Deputy Governor for Payments and Currency Management Mamerto Tangonan stated: “For CBDC… our timeline for that is to complete the pilot this year, towards the end of this year.”
He described the pilot as a “learning exercise […] to evaluate whether this technology is what it claims to be.” He further noted: “So we are piloting it, testing it with the six other domestic financial institutions.”
The six participating financial institutions include BDO Unibank Inc., China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines Inc.
“We are utilizing it to transfer funds among these financial institutions,” he clarified. “But we also want to determine if this wholesale CBDC can facilitate higher value-adding services such as securities settlement.”
He then articulated a vision for the Philippines with enhanced access to securities and similar investment vehicles, “indicating they could be acquired for smaller issue sizes and significantly lower fees so that any Juan or Maria can not only aspire but actually possess securities.”
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In February, BSP Governor Eli Remolona shared insights regarding the Philippine CBDC initiative during an interview. He mentioned that it would not operate on a blockchain but rather on a private payment and settlement system managed by the bank.
Remolona also indicated that it would be a wholesale CBDC (wCBDC), implying that it would only be accessible to retail through banks, the licensed intermediaries, for wholesale transactions. He emphasized the intention to create a system where the CBDC complements cash.
Remolona identified potential challenges associated with retail CBDCs, including disintermediation, bank runs during periods of financial stress, and expanding the central bank’s influence.
Just yesterday, the Philippine National Telecommunications Commission (NTC) commenced blocking unlicensed crypto platforms in the nation following a directive from the Securities and Exchange Commission.
Currently, Binance remains operational, although SEC Chairman Emilio Aquino mentioned that the Commission will ultimately restrict Binance after the regulator has completed an internal “transition.” An official statement from the Commission indicated that it requires additional time to assess the implications of blocking Binance and to prepare accordingly.
Overall, the Philippines is approaching crypto with caution. Similar to other nations, the technological advantages of crypto are what are truly persuading regulators and lawmakers.
Last year, the country’s Bureau of the Treasury announced intentions to issue at least 10 billion pesos (approximately $180 million) worth of one-year tokenized Treasury bonds on a blockchain system.
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