The Philippines is seeking to keep pace with other countries that are venturing into the world of central bank digital currencies (CBDC). In its latest move, the country’s central bank has revealed it will launch a research project on a digital peso, but it remains unclear if the bank will move forward with the development and rollout of the CBDC.
In a recent speech, Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas revealed the initiative, which will fall under “Project CBDC-Ph.”
However, as Diokno noted, the bank is focusing purely on research for now to cover its bases and hasn’t decided on whether it will issue a CBDC. He described the current initiative as “the BSP’s pilot project to build organizational capacity and hands-on knowledge of CBDC design, architecture, technology, and policy implications.”
The BSP joins several other central banks that have indicated they are conducting research on a CBDC but have no intention of issuing one in the foreseeable future.
Kenya was the latest, with the country’s central bank calling for public feedback on the introduction of a digital shilling. In a recent paper, the Central Bank of Kenya outlined the risks and potential benefits that a digital shilling would have, with the biggest opportunities being in retail payments and cross-border funds transfers.
Other central banks exploring the technology without committing to launching a CBDC include the U.S. Federal Reserve, the Bank of Japan, and the Bank of England.
The Philippines may be even further from a possible launch of a digital peso than its peers, with Governor Diokno recently dismissing the need for a CBDC.
“The BSP has no plans to introduce a CBDC in the near term primarily because the population remains heavily cash reliant given the country’s efficient and effective payment and settlement systems,” he said in late February.
However, back in November 2021, the BSP indicated that it was working on a wholesale CBDC as it seeks to digitalize the country’s payments systems.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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