The Philippines is considering launching a central bank digital currency (CBDC) within the next two years, aiming to reduce the influence from cryptocurrencies and increase financial security.
The above plan was announced by Central Bank (BSP) Governor Eli Remolona Jr. on February 12, with the goal of focusing on developing a wholesale version of CBDC, while eliminating blockchain technology.
The Philippine CBDC will use the Payment and Settlement System owned and operated by the Central Bank, which is expected to improve the efficiency of interbank transactions and cross-border payments.
This is quite surprising news when in September 2023, (BSP) announced that it had chosen the Hyperledger Fabric blockchain as the foundation technology for testing, having gone through comprehensive evaluation processes.
According to Mr. Remolona, the Philippines can learn from the experiences of Sweden and China in CBDC development, as these two countries are leading in domestic CBDC trials.
Internationally, the development of CBDC has faced many mixed reactions. Many financial watchdogs recognize the potential of CBDCs to improve payment systems and reduce fraud risks, but concerns remain about privacy, government surveillance and ensuring access fair across all user groups.
The wholesale CBDC model is currently quite popular because of its potential for banking and financial activities. The Philippines' approach is also seen as an initiative to mitigate risks associated with retail CBDCs, such as financial instability during crises.
Regardless, the Bank for International Settlements (BIS) said, wholesale CBDC trials have been conducted by various central banks, but improvements to existing financial systems remain a long way off. modest.
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