As the world of finance continues to transform, new forms of money challenge traditional monetary infrastructures that have existed for a long time. Currently, central bank digital currencies (CBDCs) have drawn the attention of several countriesincluding the Philippines.
At a joint event organized by Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, and the Alliance for Financial Inclusion, the BSP Governor, Benjamin Diokno, announced the launch of the CBDCPh Project, a pilot implementation of a CBDC for the countryyes According to Diokno, the project aims to improve “the security, resilience and efficiency of the payment system.”
“The project aims to build organizational capacity and practical knowledge of the key aspects of a CBDC that are relevant to a use case around addressing frictions in the national payment system.”
Diokno also highlighted the potential impact of CBDCs. The BSP governor noted that a CBDC could help government-run cash assistance programs. He underscored that the pandemic has shown the usefulness of account-based distribution of financial assistance. Diokno believes this can be used to “provide immediate support to the most vulnerable segments of society.”
While there are many potential benefits, the governor also highlighted possible difficulties the project may encounter, such as a lack of technology infrastructure. “Monetary authorities and regulators will need to develop the necessary skills and technological capacity to effectively implement and manage the risks of CBDC issuance”Diokno said.
In the United States, Lael Brainard, a member of the Federal Reserve Board of Governors, urged the US to lead research and policy when it comes to CBDCs. Citing developments in China, Brainard says the dominance of US dollar cross-border payments could be affected by CBDC developments in other countries.
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Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.