The Bangko Sentral ng Pilipinas (BSP) is exploring use cases for its preferred wholesale central bank digital currency (CBDC) after taking into consideration its advantages based on the country’s digital payment system.
“The BSP’s initial assessment of the state of the national payment system and the recent progress towards broader payments digitalization showed that a wholesale CBDC may help address frictions that affect the efficiency and safety of wholesale payments involving cross-border fund transfers, equity securities transactions settlement and intraday liquidity facilities,” the BSP said in its 2021 annual report.
The central bank said it will “proceed with the planning and conduct of pilot tests to explore the operational feasibility of these CBDC use cases in the country from 2022 onwards.”
The financial transactions of the BSP with banks using a wholesale CBDC appear readily feasible, said the BSP, while retail CBDCs would need a law or legislation. Retail CBDCs involve BSP directly distributing CBDC to the public.
Last November 2021, the BSP’s Monetary Board already noted the potential CBDC use cases in the country.
In March this year, BSP Governor Benjamin E. Diokno announced that the BSP has taken the next steps of initiating a pilot CBDC after two years of study, research and testing.