The central bank in the Philippines is exploring the viability of a central bank digital currency (CBDC) in the near future. However, as the bank’s governor revealed, the bank will only be looking to use the CBDC for wholesale payment needs.
The Bangko Sentral ng Pilipinas (BSP) has been pushing for the digitalization of payments in the country, including through expanding QR code payments and its electronic funds transfer services InstaPay and PESOnet.
CBDCs are on the central bank’s radar as well, governor Benjamin Diokno revealed on Tuesday. However, he views CBDCs as being only suitable for wholesale payments.
He stated, “We’re also thinking of digital currency, central bank digital currency (CBDC). That will be the modality for the thing. Not retail. We’ll perfect that and we’ll go into digital currency maybe at some point in the near future but this will be wholesale rather than retail.”
This is not the first time that Governor Diokno has addressed CBDCs. In May, the bank published the results of a study into CBDCs. At the time, Diokno said that the bank had been observing and learning from other central banks that were far ahead in their CBDC pursuits. However, he didn’t indicate if the bank would move forward with its own plans soon.
“Our focus has always been the provision of an enabling policy environment for digitalization with adequate consumer protection safeguards. Going forward, the same principle would apply the CBDC development,” he said at the time.
Diokno has been championing digitalization at the BSP since he took over at the helm in March 2019. He aims to digitalize at least 50% of the BSP’s services and processes by 2023, while also ensuring that over 70% of Filipinos are banked.
The Philippines has lagged behind some of its peers in the Southeast Asian region, who are much more aggressive with their CBDC plans. Thailand is leading the region, conducting domestic and international experiments with other states like Hong Kong and the United Arab Emirates.