Read about the latest insights into the Philippine central bank's wholesale central bank digital currency (wCBDC) pilot project, Project Agila. Learn how the project aims to revolutionize securities and investment accessibility by democratizing ownership and reducing fees. Stay informed about the evolving landscape of CBDC developments in the Philippines and beyond.
An official from the Bangko Sentral ng Pilipinas (BSP) has shared significant details about the central bank’s upcoming study on wholesale central bank digital currency (wCBDC). The project, known as Project Agila, is set to explore transfers between commercial banks and expand to include securities settlements and other high-value services. The BSP deputy governor for payments and currency management sector, Mamerto Tangonan, disclosed that the wCBDC pilot project would conclude by the end of the year, emphasizing the educational aspect of the initiative.
Deputy Governor Tangonan envisions a future where the Philippines enables broader access to securities and similar investment instruments, aiming to democratize their ownership by allowing for smaller issue sizes and substantially reduced fees. He emphasized the aspiration for every individual, from Juan to Maria, to not only dream of owning securities but to make that dream a tangible reality. Six domestic banks, namely BDO Unibank, China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines, are participating in the pilot project alongside the BSP. This ambitious endeavor leverages the wCBDC for fund transfers among these banks.
Furthermore, Tangonan also expressed interest in exploring the potential use of the wholesale CBDC for higher value-adding services like securities settlement, highlighting the broader scope and ambitions of the project. In February, BSP governor Eli Remolona had previously indicated that the central bank was solely considering a wCBDC, expressing concerns about bank disintermediation and related issues associated with the potential issuance of a retail CBDC. Notably, Governor Remolona clarified that the CBDC would not be operating on a blockchain.
The central bank’s positive initial assessment of a wCBDC and their planned pilot tests in 2022, known at that time as Project CBDCPh, were announced by the BSP Monetary Board. The fruition of the pilot project, known as Project Agila, was officially revealed in April 2022, marking a significant stride in the implementation of the CBDC initiative. Previous CBDC-related efforts in the Philippines included participating in a pilot study in 2023 involving the Digital Dollar Project, Western Union, and BDO Unibank, which aimed to study retail CBDC for use in remittances. While this project showed potential for reducing costs and enhancing transparency and competition, there were challenges to improving transaction speed, particularly considering the timing of most remittances arriving in the Philippines after working hours.
The Philippines is making commendable strides in the realm of CBDC, and the BSP's active pursuit of exploring wCBDC's potential applications in the financial landscape is certainly noteworthy. Stay tuned for more updates on this and other developments in the growing CBDC space.
(DEREK ANDERSEN, COINTELEGRAPH, 2024)