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The Philippines will launch a wholesale central bank digital currency pilot

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The project will be led by a cross-sectoral national team, Diokno said, as well as “external consultants from international standard-setting bodies and multilateral institutions to build on training and knowledge-sharing on CBDC development and implementation around the world.” Diokno called the project “crucial in building BSP’s mid- to long-term roadmap for more advanced wholesale CBDC projects that will further strengthen the Philippine payments system.”

A presentation prepared in advance of the roundtable states, “Given progress in implementing reforms in the area of ​​retail payments and financial inclusion, there is minimal perceived value in the use of CBDC for retail customers in the Philippines.” It noted, that at the end of 2020, about 20.1% of monthly retail payment volume was digital, up from 10% in 2018 and 1% in 2013. All government salaries are paid digitally.

The central bank envisages using the CBDC for wholesale cross-border payments, stock payments and the intraday liquidity facility (ILF). Currently, ILF is not yet fully automated. The Financial Action Task Force recently found that the Philippines has inadequate anti-terrorist financing (CFT) and anti-money laundering (AML) standards.

The country took its first steps toward CBDC last year with the release of an exploratory study. It also signed MoUs on information sharing and capacity building with the Monetary Authority of Singapore and the Central Bank of Mauritius in the areas of digital currency, fintech and Islamic banking, and participated in a study by the Bank for International Settlements on the role of CBDCs in financial inclusion.

The 24-strong group, which has grown to 28 members plus China as a “special invitation” since its inception, “coordinates the position of developing countries on monetary and development issues,” according to its website.

The Philippines will pursue a wholesale central bank digital currency pilot called Project CBDCPh, Bangkok Sentral ng Governor Benjamin E. Diokno announced on Wednesday. Diokno spoke about the project last week at a roundtable of the 14th Annual Group of 24/Alliance for Financial Inclusion Policymakers held at the Spring Meetings of the International Monetary Fund and World Bank in Washington, DC.