BSP’s Diokno Says Digital Currency Project Not Yet a Full-blown Implementation

Bangko Sentral ng Pilipinas (BSP) governor Benjamin Diokno clarifies in an ANC interview that their upcoming central bank digital currency (CBDC) project would not have a full-blown implementation immediately and that it would be an “experiment”. The central bank’s project is slated to begin in the fourth quarter of 2022, with BSP testing CBDC transactions with selected banks in the Philippines. BSP will also be consulting with peers to in assessing CBDC impact.

“We need to learn to walk before we run so that’s the purpose of this pilot, not a full-blown implementation of CBDC,” Diokno comments on the upcoming pilot program. “We are going to do this on an experimental basis which will start in the fourth quarter of this year. We will experiment with some large financial institutions limited in the Philippines.” he also adds.

Meanwhile, BSP deputy governor Mamerto Tangonan says in a televised briefing, “Tayo po ay sinisikap po natin na makapag pilot tayo ito pong last quarter ng taon na ito. Kailangan natin mag pilot para makita natin kung among magiging epekto nito sa ekonomiya at monetary policy.” (We are trying to pilot on the last quarter of the year. We need to do this, to see what would be its effect to the economy and the monetary policy).  Tangonan also adds that the central bank’s digital currency would be only used for wholesale transactions, and not for retail.

Central banks in South Korea and China have also been testing CBDCs, with the recent boom of cryptocurrency and blockchain technology inspiring central banks across the globe to venture into CBDCs. Although cryptocurrencies such as bitcoin do not have a central issuing authority and are therefore unregulated, a CBDC is regulated and issued by the country’s central bank or monetary authority. A CBDC’s value is also tied to the nation’s currency, which differs from cryptocurrencies that tend to be volatile and fluctuate erratically in value.

Source: ABS CBN News, ABS CBN News