The central bank of the Philippines (BSP) is on a mission to finalize a Central Bank Digital Currency (CBDC) pilot by the end of the year, as reported by local press. Deputy Governor for Payments and Currency Management, Mamerto Tangonan, stated during a press briefing that the timeline for completing the pilot is within the current year.
Participating Financial Institutions
The pilot involves a collaboration with six domestic financial institutions, namely BDO Unibank Inc., China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines Inc. The purpose of the pilot is to test the technology’s claims and assess its viability for use in various financial services.
A compelling vision was put forth by Tangonan for a future Philippines with more accessible securities and investment instruments. He highlighted the potential for individuals like Juan or Maria to own securities at lower fees, enabling them to participate in the market with smaller issue sizes.
Governor Eli Remolona disclosed additional details about the CBDC project, emphasizing that it would not be blockchain-based but rather operate on a private payment and settlement system owned by the bank. The focus is on a wholesale CBDC (wCBDC) accessible only through licensed intermediaries for use in wholesale transactions to complement cash.
Regulatory Environment and Crypto Platforms
The regulatory landscape in the Philippines is under scrutiny, with the National Telecommunications Commission (NTC) recently taking action to block unlicensed crypto platforms following a directive from the Securities and Exchange Commission. While Binance remains accessible for now, there are plans to eventually block the platform as regulators assess the implications.
The Philippines is approaching crypto cautiously, aligning with other countries that are gradually embracing the technology’s benefits. Last year, the Bureau of the Treasury announced intentions to issue tokenized Treasury bonds worth approximately $180 million on a blockchain system, further demonstrating the country’s interest in leveraging digital assets.
The Philippines Central Bank’s focus on completing the CBDC pilot signifies a step towards modernizing the financial landscape and expanding access to innovative financial services. By working with domestic financial institutions and addressing regulatory challenges, the country is poised to navigate the evolving world of digital currencies effectively.
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