Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the completion of wholesale Central Bank Digital Currency (CBDC) testing in the Phillipines.
Phillipines CBDC
The Bangko Sentral ng Pilipinas (BSP) recently completed the testing phase of Project Agila. This is the proof-of-concept stage of the wholesale Central Bank Digital Currency (CBDC) pilot. The trial tested whether banks in the Philippines can pay each other outside of bank operating hours during evenings, weekends and holidays. BSP Governor Eli M. Remolona, Jr. noted in a statement on Thursday:
“Wholesale CBDCs are expected to enhance liquidity management, reduce settlement risks, and support financial stability. Insights from this project will guide the BSP’s CBDC roadmap. Our goal is to leverage new technologies to further enhance the efficiency and resilience of the national payment system.”
No findings were released, but the BSP stated the evaluation with financial institutions covered functional, performance, security, exploratory, and end-to-end and programmability testing. The central bank plans to launch a wCBDC during Mr Remolona’s term, which ends in 2029, although it is expected to be sooner rather than later and 2025 or 2026 have been mooted as potential release dates.
CBDCs are digital money denominated in the national unit of account and are direct liabilities of the central bank, in this case the Philippine peso and the BSP. The use of wholes CBDC's would allow commercial banks and other financial institutions to use them for interbank payments, securities, transactions, and cross-border payments. According to BSP Deputy Governor Mamerto Tangonan:
“Roadmapping like okay, knowing what we know now that we didn’t know before, how do you want to use this? Where do you want to go forward? You want to launch this already, or do we do a second round of proof of concept?”
Tangonan noted they are aiming to do the roadmapping in January, and that the wholesale CBDC could possibly be used for cross-border trade finance and security settlement transactions. He also noted that while a number of benefits have already been identified for a wholesale CBDC, the central bank has yet to see the need for a retail CBDC.
The BSP is just one of number of central banks exploring the potential of CBDC. Other nations such as China and Australia have made significant strides in this domain, each focusing on tailored use cases. In China the People’s Bank of China has expanded its retail CBDC pilot to millions of users. The Reserve Bank of Australia has recently completed wholesale CBDC trials targeting cross-border settlements.
Have a great day.
Peace. CryptoGod-1.
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