BSP Reveals Plans for Wholesale Central Bank Digital Currency Study

The Bangko Sentralng Pilipinas (BSP) is moving forward with its plans to study wholesale central bank digital currency (wCBDC), with a pilot project named Project Agila expected to conclude by the end of the year. BSP’s deputy governor, Mamerto Tangonan, described the project as a “learning exercise” aimed at exploring the democratization of access to securities and investment instruments, making them more accessible to the general public. Six domestic banks are participating in the pilot alongside the BSP, utilizing wCBDC for fund transfers among themselves. BSP Governor Eli Remolona emphasized that the central bank is solely considering wCBDC to address concerns about bank disintermediation, clarifying that the CBDC would not operate on a blockchain.

BSP by engaging in pilot projects with domestic banks, the BSP aims to understand the potential applications and implications of wCBDC, particularly in democratizing access to investment opportunities. However, challenges such as concerns over bank disintermediation and the need for improved transaction speed highlight the complexities involved in implementing CBDCs effectively. As the BSP continues its research and pilot testing, it underscores the importance of thorough evaluation and collaboration with industry stakeholders to ensure the successful integration of digital currency solutions in the country’s financial landscape.