BSP announces plans to Release a Central Bank Digital Currency in 2022

Banko Sentral ng Pilipinas (BSP) governor, Benjamin E. Diokno, recently shared the country’s plans regarding central bank digital currencies (CBDC).

CBDCs have been a rapidly developing digital asset throughout the globe, as even governments against crypto have pursued CBDC development.

The BSP initiated an exploratory study on CBDCs, and it has analyzed several angles concerning the asset’s implementation. Additionally, the national payment system also provided information on the most appropriate uses of digital currency. CBDCs will reportedly help the BSP improve the national payment system’s efficiency, safety, and resiliency.

“As [for] next step, the BSP targets to roll-out in the near term, a pilot CBDC implementation which we call Project CBDCPh. The project aims to build organizational capacity and hands-on knowledge of key aspects of CBDC that are relevant for a use case around addressing frictions in the national payment system,” said Diokno.

“Cross-border money transfers is also another financial inclusion area that CBDCs can be highly relevant. Remittance costs continue to average globally at 6.5% of the amount sent, considerably way above the 3% target of the UN Sustainable Development Goals (SDGs). Interoperability of CBDC between jurisdictions could provide substantial benefits for remittance-receiving economies, such as the Philippines, by reducing reliance on costly correspondent banking networks,” he added

Cryptocurrencies are not currently accepted as legal tender in the Philippines. However, an entity can provide services if they are registered with the BSP.

Following its adoption of CBDCs, the Philippines will be joined by other major countries including India, Japan, Zimbabwe, and Russia.

Source: FXEmpire