Philippines Unveils Wholesale CBDC Plans, Excludes Blockchain

• The CBDC will use the central bank’s payment and settlement system.
• Remolona said that CBDC was possible within the next two years.

Eli Remolona, governor of the Bangko Sentral ng Pilipinas (BSP), has announced that the BSP plans to launch a central bank digital currency (CBDC) for wholesale use in the coming years.

In 2020, the central bank of the Philippines began investigating CBDCs. November saw the Bank for International Settlements (BIS), the global coordinator of central banks, state that the institutions aren’t ready for the dangers presented by CBDCs.

Central Bank’s Payment and Settlement System

Remolona detailed the BSP’s intention to build a CBDC in an interview with the local daily Inquirer.net on February 12. Blockchain technology will not be used in the project by the central bank, as stated by its chief.

As an alternative, the CBDC will use the central bank’s payment and settlement system. The BSP’s primary area of interest is a wholesale CBDC that banks will manage. Concerns voiced by the central bank about the retail CBDC include the possibility of disintermediation, bank runs in times of financial crisis, and the further amplification of the central bank’s footprint.

Sweden and China, Remolona said, are creating CBDCs to “rival cryptocurrencies” and digitally supplement cash. The Philippines, in his opinion, can learn from their mistakes. The official said that the CBDC “would definitely happen” under his governorship. In response to the reporter’s inquiries, he said that it was possible within the next two years.

The Philippines is protecting its domestic cryptocurrency sector from international competitors by taking a firm stand on the issue. Due to Binance’s unregistered activities in the Philippines, the SEC reaffirmed its prohibition on the exchange in December 2023.

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