The Philippines to Launch Wholesale CBDC in Two Years
The Bangko Sentral ng Pilipinas (BSP) is set to launch the digital version of the Central Bank currency (CBDC) within the next two years. Unlike other central banks, the BSP has decided not to use blockchain for its CBDC project due to difficulties faced by other banks in their blockchain experiments. Instead, the digital currency will operate on a private payment and settlement system controlled by the central bank.
Bank-Mediated Transactions as Primary Channel
In the BSP’s approach, banks will play a crucial role in the CBDC infrastructure, serving as the primary channel through which consumers can obtain and process CBDC payments. This model aims to leverage existing banking infrastructure for an efficient integration of the CBDC into the Philippine financial system. The BSP looks to Sweden and China as examples of successful CBDC projects that can improve financial transactions in the country.
Regulatory Aspects and Crypto Market’s Opinion
The implementation of the CBDC initiative coincides with increased regulation of the cryptocurrency industry by the Philippines Securities and Exchange Commission (SEC). The government’s conservative approach to foreign crypto exchanges, such as Binance, highlights the importance of compliance and customer protection laws in the evolving digital finance landscape. Additionally, the Philippines is exploring tokenized financial instruments and recently decided to issue tokenized treasury bonds as part of its CBDC project, paving the way for innovative opportunities in the future.
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