BSP’s deputy governor for payments and currency management sector, Mamerto Tangonan, unveiled additional details about the central bank’s plans to explore wholesale central bank digital currency (wCBDC), known as Project Agila, in a recent press conference.
Tangonan disclosed that Project Agila, aimed at piloting wCBDC, is slated to conclude by the end of the year. Describing it as a “learning exercise,” Tangonan emphasized the vision for democratizing access to securities and investment instruments, enabling broader participation.
Six domestic banks, including BDO Unibank, China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines, are collaborating with BSP in the pilot project. The initiative utilizes wCBDC for interbank fund transfers.
Tangonan highlighted the potential expansion of wCBDC’s utility beyond fund transfers, such as in securities settlement, aiming for higher value-adding services.
BSP governor Eli Remolona previously expressed the central bank’s inclination towards wCBDC over retail CBDC, citing concerns regarding bank disintermediation. He clarified that the planned CBDC would not operate on a blockchain.
The Philippines initially signaled interest in CBDC issuance in 2020. Following positive assessments and pilot tests, known as Project CBDCPh, starting in 2022, BSP moved forward with Project Agila. Additionally, the country participated in a 2023 pilot study involving the Digital Dollar Project, Western Union, and BDO Unibank, focusing on retail CBDC’s potential benefits for remittances.
While the study showed promising results in cost reduction and increased transparency, challenges remain, particularly in transaction speed, given most remittances arrive after working hours. Efforts are underway to address these issues for enhanced efficiency.
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