BSP plans to test digital currency in the last quarter of 2022

MANILA — The Bangko Sentral ng Pilipinas said on Thursday that it plans to pilot test the central bank’s digital currency by the final quarter of the year.

The pilot of the project called CBDCPh aims to assess the impact of the new financial tool on the country’s economy and monetary policy, Deputy Governor of Bangko Sentral ng Pilipinas Mamerto Tangonan said during a televised briefing.

“Tayo po a sinisikap po natin na makapag pilot tayo ito pong last quarter ng taon na ito. Kailangan natin mag pilot para makita natin kung among the magiging epekto nito sa ekonomiya to monetary policy,” Tangonan said.

(We try to pilot the last quarter of the year. We have to, to see what its effect on the economy and monetary policy would be)

He added that the BSP wants to see if it can replicate the benefits seen by other central banks, such as faster transactions.

Unlike cryptocurrencies like bitcoin which are unregulated and have no central issuing authority, a CBDC is issued and regulated by a country’s monetary authority or central bank. While the value of cryptocurrencies tends to fluctuate wildly, the value of a CBDC is pegged to a country’s currency.

Tangonan meanwhile emphasized that its digital currency would be used for wholesale or large transactions and not for retail.

The use of blockchain technology and cryptocurrency has inspired central banks around the world to explore CBDCs.

Currently, other central banks, such as China and South Korea, are also testing the use of CBDCs.

BSP has been proactive in its digitization approach to foster financial inclusion. It has issued policies regulating e-money issuers as well as digital banks approved as a new banking category.

It has also set up InstaPay and PESONet online funds transfers under the country’s National Retail Payments System or NRPS.

As part of its roadmap, the BSP aims to digitize 50% of payments and bring at least 70% of adult Filipinos into the formal financial system by 2023.

But BSP Governor Benjamin Diokno said the accelerated adoption of digital payments due to the pandemic could help the central bank achieve its digitization goals sooner than expected.