The Philippines Plan to Introduce Central Bank Digital Currency: How Will This Change the Country’s Financial Sector?
The Philippines Plans to Introduce Central Bank Digital Currency
The Philippines is planning to join the countries introducing a central bank digital currency (CBDC). Governor of the Bangko Sentral ng Pilipinas (BSP), Eli Remolona Jr., announced that the country aims to do so within the next two years. This decision is intended not only to improve the efficiency and security of payments but also to create new opportunities for the banking sector.
Support on BSP Infrastructure
The actions related to the introduction of a central bank digital currency in the Philippines will be built on the BSP infrastructure. Importantly, the planned CBDC will not utilize blockchain technology, often associated with such innovations. This approach is meant to enable the effective functioning of the digital currency and contribute to the development of the country’s financial systems.
CBDCPh Pilot Project
In 2022, the BSP initiated a pilot project named CBDCPh, collaborating with the International Monetary Fund (IMF) in this endeavor. The project aims to test the new digital currency and assess its potential in the context of daily transactions. The Philippines aim for by 2023, 50% of all transactions to be conducted digitally, and for the number of residents with bank accounts to reach 70%.
Global CBDC Development Trend
According to Atlantic Council data:
- By December 2023, as many as 130 countries, representing 98% of global GDP, are considering the introduction of a central bank digital currency.
- 19 G20 countries are in an advanced stage of CBDC development, with 9 of them already conducting pilots.
- Altogether, 11 countries worldwide have decided to implement a digital currency, with one of the most advanced projects being the digital yuan pilot in China, involving 260 million users across over 200 test scenarios.
The Philippine initiative to introduce a central bank digital currency is part of a global trend in developing financial systems based on digital technology. This decision is expected to bring various benefits to the country’s economy and improve the functioning of the banking sector and payment systems.
