The Philippine Central Bank is planning to introduce a wholesale central bank digital currency (CBDC) in the next two years that will be mediated by banks rather than using blockchain technology. The bank wants to focus on a wholesale CBDC used for interbank transactions first, before considering a retail CBDC for consumers. This is due to concerns about issues like bank disintermediation and bank runs with a retail CBDC.
The Central Bank cites the CBDC successes of countries like Sweden and China as models. The bank is confident a CBDC could be launched within the governor’s term in the next two years. This comes as the Philippines has seen significant growth in digital payments, with its share increasing from 1% in 2013 to over 40% in 2022.
The Central Bank has introduced initiatives like QR code payments in public places to further boost digital payments. It has a goal of transitioning half of retail payments to digital and integrating 70% of adults into the formal financial system this year. The bank is now mapping out the next phase of the country’s digital payments roadmap from 2024-2026.
In November 2023, the Philippines will also offer its first tokenized Treasury bonds, valid for 1 year, continuing the country’s push towards digitization and tokenization in its financial system.
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