The Philippines will conduct a central bank wholesale digital currency pilot project, to be dubbed “Project CBDCPh,” Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced on Wednesday. Diokno spoke about the project last week at a panel discussion at the 14th annual meeting of the Group of 24/Alliance for Financial Inclusion, held at the International Monetary Fund and World Bank Spring Meetings in Washington, DC.
The project will be led by a national cross-sector team, Diokno said, as well as “external advisors from international standard-setting bodies and multilateral institutions to leverage training and knowledge-sharing on CBDC development and implementation around the world.” . Diokno called the project “critical to building the BSP’s medium- and long-term roadmap for more advanced wholesale CBDC projects that will further strengthen the Philippine payment system.”
A presentation prepared before the roundtable stated: “There is minimal perceived added value to the use of retail CBDC in the Philippines, given the progress in implementing retail payment reforms and financial inclusion.” The presentation noted that around 20.1% of monthly retail payment volume was in digital form at the end of 2020, up from 10% in 2018 and 1% in 2013. All government salaries are paid digitally.
The central bank plans to use the wholesale CBDC for cross-border payments, equity payments and the intraday liquidity facility (ILF). At present, the ILF is not fully automated. Recently, the Financial Action Task Force (FATF) has pointed out that the Philippines does not have adequate regulations to combat the financing of terrorism and money laundering.
The country took its first steps towards a CBDC last year with the publication of an exploratory study. It also signed memorandums of understanding on information sharing and capacity building with the Monetary Authority of Singapore and the Central Bank of Mauritius in the fields of digital currency, fintech and Islamic banking, and participated in a Bank study. of International Payments on the role of CBDCs in financial inclusion.
The Group of 24, which has grown to 28 members since its founding, plus China as a “special guest,” coordinates “the position of developing countries on monetary and growth issues,” according to its website.
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