BSP was currently testing three use cases of a future central bank digital currency.
BSP — The Bangko Sentral ng Pilipinas was currently testing three (3) use cases of a future central bank digital currency (CBDC).
The central bank was currently testing three (3) use cases of a future CBDC — including securities settlement and in managing intraday liquidity.
According to BSP Governor Benjamin Diokno, “exploratory works” on the three identified use cases for CBDC in the country were “currently being undertaken” for settlement of equity securities, cross-border payments, and intraday liquidity facility.
Diokno said that the central bank started to analyze those use cases in the 4th quarter of 2021.
He said previously that before issuing its own CBDC, the central bank needed to strengthen the domestic retail payment system and if a digital currency will add value to its existing real-time, gross settlement system.
READ ALSO: BSP Proposes Guidelines On Digital Financial Marketplace
In a Global Source Partners paper published on February 3, Diokno said that the central bank continued to evaluate potential use cases for a CBDC.
To recall, Diokno said in 2020, when the BSP chief first openly discussed the eventuality of a CBDC, that the ongoing research, collaboration, and testing being conducted by the central bank’s technical working group (TWG) on CBDCs will not likely result in a CDBC issuance in the next 3 to 5 years since a lot more has to be done — including shifting at least 50% of all payment transactions into digital.
The central bank’s TWG was currently consulting with other central banks particularly the Monetary Authority of Singapore and the Hong Kong Monetary Authority, and have collaborative experimentation with other financial institutions and central banks.
According to the central bank, it will take some time before the Philippines is ready for a CBDC since several issues needed to be addressed and settled first, such as payments safety and efficiency.
The central bank was far from a pilot implementation stage since the TWG will conduct a more in-depth study of the CBDC projects conducted by other central banks in terms of necessary human resources, timelines and potential costs, and technological infrastructures such as hardware and software.
Also, it will continue to study the different technology platforms whether centralized or distributed, among others.
The central bank said that a CBDC roadmap will provide a conceptual blueprint of its own digital currency, but they weren’t there yet and “still a long way to go” before issuing a CBDC.
Thank you for visiting Newspapers.ph. You may express your reactions or thoughts in the comments section. Also, you may follow us on Facebook.