Philippines Central Bank Planning for Issuing Its Own Digital Currency
October 22, 2020 4:26 pm
The governor of Philippine central bank, Benjamin Diokno has announced that the Philippines Central Bank is studying at the possibility of releasing its digital currency.
According to a report by Bloomberg, July 29, the Philippine central bank, or Bangko Sentral ng Pilipinas (BSP) has created a committee to investigate the feasibility and potential policy implications of issuing its own CBDC, or digital counterpart to the physical peso.
“We have to first look at the findings of the group before making a decision.”– Benjamin Diokno, Governor of Philippine Central Bank.
Diokno himself believes that digitally issued currencies do not currently pose a threat to demand fiat money. He also restated the view of many central banks and governments, which is that blockchain technology is as important as the cryptocurrencies it supports.
“Cryptocurrency for us has always been beyond the asset itself but more on the blockchain technology that underpins it.”
In a press briefing on Oct. 22, Diokno said that the central bank recently completed its study on digital currencies as a potential future alternative to the current system of physical peso bills as a medium of transferring value, still rejected the possibility that a CBDC could be issued in the near term.
The study so far has suggested that ongoing research is needed to look into capacity-building and the creating of networks between other central banks and financial institutions. So far, the bank’s study has covered basic issues surrounding CBDCs, focusing on implications for monetary policy, legal frameworks, payments and settlement systems, financial inclusion, and regulatory oversight.
The governor has said that CBDC research at the BSP could benefit from a study of the business models of private-sector digital currencies in the Philippines, as well as the use of industry sandboxes. The central bank plans to look into how to enhance the country’s existing payment system and to draw upon other central banks’ CBDC research worldwide.
CBDC research in the Philippines has emerged against the backdrop of the central bank’s Digital Payments Transformation Roadmap, which aims to turn over 50% of retail payments into digital form by 2023 and to assure that 70% of citizens have a bank account by the end of the period. Continuing CBDC research could need technical input from the International Monetary Fund and Bank of International Settlements, in the BSP’s outlook.
The central bank remains committed to the opinion that CBDCs are superior to private digital currencies, and has indicated that its digital innovations will continue to evolve within the existing structure of fiat currencies.