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Philippines: No urgency in issuing digital currency, says BSP
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) sees no urgency in the issuance of its own digital currency as the country’s digital payment channels remain robust, safe and convenient.
“There’s no urgency for this. Our settlement and payment system is working very well. I think we will maximize the benefits from our existing payment system,” BSP Governor Benjamin Diokno said in an interview on ABS-CBN News Channel.
Central bank digital currecies or CBDCs are designed to be equivalent in value to a nation’s paper currency and subject to the same government-backed guarantees. In addition to printing money, central banks can issue CBDCs as a digital representation of a country’s fiat currency.
Diokno said the central bank continues to monitor and observe developments in other jurisdictions with regards to the use of CBDCs.
According to the BSP chief, the regulator is initially looking at a wholesale basis rather than retail basis.
“Maybe we’ll deal with government agencies and specific banks. Not down to the individuals,” he said.
Diokno announced last week that the central bank was set to roll out a pilot CBDC implementation via the CBDCPh in line with the country’s national payment system.
“The project aims to build organizational capacity and hands-on knowledge of key aspects of CBDC that are relevant for a use case around addressing frictions in the national payment system,” Diokno said.
The BSP and the Alliance for Financial Inclusion (AFI) jointly hosted the Knowledge Exchange Program on CBDC for Financial Inclusion early this month as part of ongoing efforts to explore and evaluate potential use cases of the technology.
“We can say that CBDC may be an idea whose time has come, but certainly it has many aspects that need to be better understood,”
Diokno said.
The regulator initiated an exploratory study on CBDC last year, followed by a national payment system assessment to identify relevant use cases for the digital fiat money.
The knowledge exchange program featured insights from central banks, multilateral institutions, policy think tanks, financial service providers and other private institutions.
It examined the potential and impact of CBDC on financial inclusion and looked at the various design considerations and implementation challenges, including the underlying technology.
Aside from the BSP, participants from the central banks of Malaysia, Thailand, Cambodia, Armenia, Bahamas, Ghana, and Sweden attended the three-day virtual knowledge exchange program.
The BSP is a founding member of AFI, a global network of 100 members from 89 countries composed of central banks and regulatory financial institutions working jointly to promote financial inclusion across the globe.
In October 2020, Diokno said the central bank was not likely to issue its own digital currency within three years as the regulator further evaluated the possible implications and potential risks from the perspectives of monetary policy, financial supervision, payments and settlements as well as financial inclusion.
Source: https://www.philstar.com/business/2022/03/18/2167982/no-urgency-issuing-digital-currency-says-bsp