The pilot project – CBDCPh – will test the use of CBDCs for large-scale financial transactions across a limited number of financial institutions.
The Philippines’ de facto central bank – Bangko Sentral ng Pilipinas (BSP) – is furthering efforts to strengthen its payment system by launching a wholesale CBDC pilot project.
The bank has proceeded with an experiment that will test the use of central bank digital currencies (CBDCs) for large-scale financial transactions “on a 24/7 basis across a limited number of financial institutions,” the bank noted.
As reported by FX Empire in March, the bank’s governor Benjamin E. Diokno said that the country’s CBDC pilot – dubbed CBDCPh – will be rolled out in the “near term.” The decision came after the central bank analyzed various angles regarding CBDC’s implementation.
The BSP Governor announced the Wednesday update during a policymakers’ roundtable discussion. Diokno said that the CBDCPh marks a major step in understanding the opportunities and risks associated with wholesale CBDCs.
“Learnings from the pilot will be critical in constructing the BSP’s medium- to long-term roadmap for more advanced wholesale CBDC projects that shall further strengthen the Philippine payment system.”
Implemented by the BSP, project CBDCPh provides a comprehensive outlook on the potential implications of CBDCs in the country’s financial system. It hopes to address frictions in the existing national payment system, in areas such as safety and reliability.
According to Diokno, a wholesale CBDC would look into problems in “large cross-border foreign currency transfers, settlement risk exposure and from using commercial bank money in equities, and operating an intraday liquidity facility.”
The announcement noted that an intersectoral project management team leads the CBDCPh in order to ensure coverage of critical operational areas.
Sujha Sundararajan is a writer-journalist with 7+ years of experience in Blockchain, Cryptocurrency and in general, FinTech news reporting. Her articles have featured in multiple journals such as CoinDesk, Protos, Bitcoin Magazine, CCN, Asia Blockchain Review, BeInCrypto and EconoTimes to name a few. She holds a Master’s in Journalism from the Indian Institute of Journalism and New Media and is also an accomplished Indian classical singer.