Central Bank of the Philippines to Launch Digital Bank Currency – a New Direction in the Financial System

The Central Bank of the Philippines is Planning to Introduce a Digital Bank Currency

The Filipino central bank, Bangko Sentral ng Pilipinas (BSP), has announced plans to launch a wholesale Central Bank Digital Currency (CBDC) within the next two years. This decision aims to modernize the Philippine financial system and enhance the security of monetary transactions.

No Blockchain Foundation and Denial of Retail CBDC Plans

It is worth noting that the CBDC of the Philippines will not be based on blockchain technology, as is the case with cryptocurrencies. Furthermore, plans for a retail version of the digital bank currency have been officially denied by the central bank.

Similar Implementation to Sweden’s e-Krona and China’s e-CNY

BSP Governor, Eli Remolona Jr., confirmed the plans for the wholesale CBDC in an interview with Inquirer.net. The virtual assets will operate without the need for blockchain infrastructure, and monitoring will be carried out through the Philippines’ Payment and Settlement System (PhilPass), controlled by the central bank.

Combatting Financial Fraud and Cyberattacks

The aim of CBDC is to increase the security of financial transactions and prevent fraud and cyberattacks. This model is intended to replicate the success of Sweden’s e-Krona and China’s e-CNY, providing stability and security for users.

Addressing the Impact of Cryptocurrencies on the Monetary System

The Philippine central bank aims to reduce the impact of cryptocurrencies on the monetary system by introducing its own digital bank currency. It is argued that CBDC is more stable than cryptocurrencies, which could contribute to improving the country’s financial condition.

Conclusion of Pilot Trials in Other Countries

The Bank for International Settlements (BIS) has noted that previous pilot trials of CBDC in other countries did not yield the expected results and were not more efficient than the existing financial infrastructure.

Summary

The introduction of a digital bank currency by the Central Bank of the Philippines is a step towards modernization and increased security of monetary transactions. CBDC aims to improve the stability of the financial system and minimize the risk associated with cryptocurrencies. The implementation of this innovation could contribute to the development of the Philippine economy and provide greater security for users of the banking system.