Bangko Sentral ng Pilipinas (BSP) will launch a pilot project of a wholesale central bank digital currency (CBDC), dubbed CBDCPh, as part of efforts to promote the stability of the payment system’s country.
Philippines central bank to trial wholesale CBDC
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.
“Learnings from the pilot will be critical in constructing the BSP’s medium- to a long-term roadmap for more advanced wholesale CBDC projects that shall further strengthen the Philippine payment system,” BSP governor Benjamin Dionko said at an annual policymakers’ roundtable.
According to BSP, about 20.1% of monthly retail transactions used digital payments in the Philippines at the end of 2020, up from 10% in 2018. The central bank warns of the minimal perceived added value of retail CBDCs in the Philippines due to the advancement and use of existing digital payment methods. Unlike retail CBDCs, wholesale CBDCs are restricted to banks and other financial institutions.
A wholesale CBDC could help reduce friction in cross-border remittances, equity securities settlement, and intraday liquidity facilities.
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