Philippines to launch wholesale central bank digital currency pilot

The Philippines will pursue a wholesale central bank digital currency pilot project, which will be called Project CBDCPh, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced on Wednesday. Diokno spoke about the project last week at a 14th Annual Group of 24/Alliance for Financial Inclusion Policymakers Roundtable held at the International Monetary Fund and World Bank Spring Meetings. in Washington, DC.

The project will be led by a cross-sector national team, Diokno said, along with “external advisors from international standards bodies and multilateral institutions to build on training and knowledge sharing on the development and implementation of work of CBDCs around the world”. Diokno called the project “critical in building BSP’s medium to long-term roadmap for more advanced wholesale CBDC projects that will further strengthen the Philippine payment system.”

A presentation prepared ahead of the roundtable said, “There is minimal perceived added value for retail CBDC use in the Philippines, given the progress made in implementing retail payments reforms and the ‘financial inclusion’. He noted that about 20.1% of monthly retail payment volume was in digital form at the end of 2020, compared to 10% in 2018 and 1% in 2013. All government salaries are paid digitally.

The central bank plans to use the wholesale CBDC for cross-border payments, equity securities payments and the intraday liquidity facility (ILF). Currently, ILF is not fully automated. The Financial Action Task Force recently identified the Philippines as having inadequate anti-money laundering and anti-terrorist financing standards.

The country took its first steps towards a CBDC last year with the publication of an exploratory study. It has also signed MoUs on information exchange and capacity building with the Monetary Authority of Singapore and the Central Bank of Mauritius in the areas of digital currency, fintech and Islamic banking. , and participated in a study by the Bank for International Settlements on the role of CBDCs in financial inclusion.

The Group of 24, which has grown to 28 members since its founding plus China as a “special guest”, coordinates “the position of developing countries on monetary and development issues”, according to its website.

Sylvia B. Polson