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Pilot run of Central Bank Digital Currency completed by end 2024 — BSP

Pilot run of Central Bank Digital Currency completed by end 2024 — BSP

The Bangko Sentral ng Pilipinas’ (BSP) pilot run of its wholesale Central Bank Digital Currency (CBDC) project is seen completed by the end of 2024.

“For CBDC… our timeline for that is to complete the pilot this year, towards the end of this year,” BSP Deputy Governor for Payments and Currency Management Sector Mamerto Tangonan said at a press briefing on Wednesday.

In September last year, the BSP announced the revival of the CBDC project, renamed as Project Agila.

It was first announced in 2022, but later on, then-BSP Governor Benjamin Diokno —who later stepped in as Finance secretary— said that the country should focus more on the existing digital payments system instead of considering a CBDC.

The central bank defines CBDCs as “form of digital money denominated in the national unit of account and are direct liabilities of the central bank.”

The BSP said wholesale CBDCs may be issued to commercial banks and other financial institutions to settle interbank payments, securities transactions, and cross-border payments, among others.

Tangonan said that the pilot run of the BSP’s CBDC project “was designed for learning exercise in order to put us in a better position to assess whether this technology is what, itself, claims to be.”

“So we are piloting it, testing it with the six other domestic financial institutions,” the BSP official said.

The six participating financial institutions in the pilot project are 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 using it to transfer funds among these financial institutions. But we also like to see if this wholesale CBDC can be used for higher value-adding services like securities settlement,” Tangonan said.

“We envision a Philippines where access to securities and similar investment instruments can be democratized, meaning they could be purchased for smaller issue sizes and much much lower fees so that any Juan or Maria cannot only dream but actually own securities,” he said.

BSP Governor Eli Remolona had said that by the end of Project Agila’s pilot run, the central bank and the banking sector will assess the possible launch of wholesale CBDCs for the whole country.

The BSP had said that the Project Agila aims to orient the central bank and participating financial institutions on CBDC technology solutions that have the potential to enhance the country’s large-value payment system. — RSJ, GMA Integrated News