The central bank wants to learn from private-sector digital currencies — but still believes they are inferior to central bank money.
Philippine central bank governor Benjamin Diokno has announced that the institution’s “exploratory” study of central bank digital currency study suggests that much more work is needed to make a digital peso a reality.
During the summer, Bangko Sentral ng Pilipinas had confirmed it was investigating the feasibility and potential policy implications of issuing its own CBDC, or digital counterpart to the physical peso.
In a press briefing, Diokno reportedly rejected the possibility that a CBDC could be issued any time in the near future. The study so far has suggested that ongoing research is needed to look into capacity-building and the creating of networks between other central banks and financial institutions.
So far, the bank’s study has covered basic issues surrounding CBDCs, focusing on implications for monetary policy, legal frameworks, payments and settlement systems, financial inclusion, and regulatory oversight.
The governor has said that CBDC research at the BSP could benefit from a study of the business models of private-sector digital currencies in the Philippines, as well as the use of industry sandboxes. The central bank plans to look into how to improve the country’s existing payment system and to draw upon other central banks’ CBDC research worldwide.
CBDC research in the Philippines has emerged against the backdrop of the central bank’s Digital Payments Transformation Roadmap, which aims to switch over 50% of retail payments into digital form by 2023, and to ensure that 70% of citizens have a bank account by the end of the period.
Ongoing CBDC research could require technical input from the International Monetary Fund and Bank of International Settlements, in the BSP’s view.
The central bank remains committed to the view that CBDCs are superior to private digital currencies, and has indicated that its digital innovations will continue to evolve within the existing structure of fiat currencies.