Philippine Government to Introduce Central Bank Digital Currency
The Philippine government has decided to develop a Central Bank Digital Currency (CBDC) instead of relying on decentralized blockchain networks. The Bangko Sentral ng Pilipinas (BSP) plans to launch the CBDC within the next two years to provide a regulated and stable alternative to volatile cryptocurrencies.
BSP’s Approach: Wholesale CBDC
Reports suggest that the BSP will introduce a wholesale CBDC for institutional use, focusing on enhancing the efficiency and safety of domestic and international payments. Retail CBDCs are reserved for public use, but the BSP is prioritizing financial stability and risk mitigation, considering the potential risks associated with retail CBDCs.
CBDC Development Timeline and Technology
The BSP began studying CBDCs in 2020, despite concerns raised by the Bank for International Settlements. The Philippine CBDC will not utilize blockchain or digital ledger technology, taking inspiration from China’s e-CNY to provide a secure digital currency option.
Initial Distribution and Regulatory Landscape
The CBDC will operate alongside physical money and will initially be distributed to commercial banks, aiming to enhance payment system efficiency and security. The Philippines is also increasing regulatory scrutiny in the crypto sector, with actions by the Philippine Securities and Exchange Commission against platforms such as Gemini and Binance. This reflects concerns about investor protection and regulatory compliance, a global trend seen in countries like India.
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