Philippines central bank moving ahead with wholesale CBDC plans within two years but rules out retail version for now over financial stability concerns.
The Bangko Sentral ng Pilipinas (BSP) is likely to issue a wholesale central bank digital currency (CBDC) within two years, BSP Governor Eli Remolona Jr. told journalists on Monday. However, a retail version for use by the general public has been ruled out.
Remolona said the decision is to develop a wholesale CBDC that will have banks as the only counterparties initially. The aim is to improve efficiency, safety and robustness in domestic and cross-border payments.
"The decision is to limit it to wholesale - no retail," Remolona stated.
He confirmed that a wholesale CBDC is definitely achievable within his term as governor, implying a possible launch within two years.
Remolona noted that other central banks have attempted to use blockchain technology to power their CBDCs, but claimed "it didn't go well." As such, the BSP will build its wholesale CBDC using the existing Philippine Payment and Settlement System it operates.
The move follows global trends of central banks developing digital tokens to provide alternatives to volatile cryptocurrencies. However, Remolona acknowledged retail CBDCs risk accelerating bank runs during financial crises - a key factor in the BSP's decision not to pursue a token for public use at this time.
