The Bangko Sentral ng Pilipinas (BSP) plans to launch a pilot central bank digital currency (CBDC) soon, its chief has said.
“As a next step, the BSP aims to deploy in the short term a pilot implementation of the CBDC which we call the CBDCPh project,” Bangko Sentral Governor Benjamin Diokno was quoted in a statement released by the central bank on Wednesday. .
He went on to say that the goal of the project is to establish organizational capacity and working knowledge of important CBDC features that are relevant for a use case involving reducing friction in the national payment system.
“We can say that CBDC may be an idea whose time has come,” Diokno said, “but certainly it has many aspects that need to be better understood.”
The BSP said that in 2021, it launched an exploratory study on the CBDC, followed by an assessment of the national payment system to find suitable use cases for digital fiat currency.
The plan was unveiled by Diokno during the CBDC knowledge exchange program that Bangko Sentral said it co-hosted with the Alliance for Financial Inclusion from March 1-3 this year.
He stressed that “it is part of [the] ongoing efforts to explore and evaluate potential use cases for the technology. »
Central banks, international organizations, policy think tanks, financial service providers and other business entities were among the attendees of the three-day knowledge-sharing event, Bangko Sentral noted.
The program examined the potential and impact of CBDC on financial inclusion, as well as the many design considerations and implementation issues, and underlying technology.
Participants from central banks in Malaysia, Thailand, Cambodia, Armenia, Bahamas, Ghana and Sweden attended the three-day virtual knowledge-sharing event, in addition to BSP.
The Bangko Sentral said it was a founding member of the Alliance for Financial Inclusion, a global network of central banks and financial regulatory institutions with 100 members from 89 countries.
According to the Bank for International Settlements (BIS), CBDCs are digital currency denominated in the national unit of account. It is also a liability of the central bank.
Defined further, a “general purpose” or “retail” CBDC is a CBDC intended to be a digital equivalent of currency for use by end users such as households and businesses.
“As such, it provides a new option for the general public to hold money. CBDC is different from cash because it comes in a digital form unlike physical coins and banknotes,” said said the BRI.