Philippines to Launch Central Bank Digital Currency by 2029
The Philippines is on track to issue its wholesale central bank digital currency (CBDC) by 2029, according to Deputy Governor Mamerto Tangonan. Project Agila, the central bank's CBDC initiative, is nearing the completion of its proof-of-concept phase, as reported by The Philippine Star.
Project Agila, initially launched in December 2022 as Project CBDCPh, has been rebranded in September 2023 to better reflect its focus on streamlining interbank, securities, and cross-border transactions. This initiative was introduced in response to the global interest in tokenized fiat currencies.
Tangonan expressed confidence in the project's progress, stating, "The governor is very early in his term and we’re already about to conclude proof of concept. This is an innovative payment instrument." The Bangko Sentral ng Pilipinas (BSP) is set to release a report on the findings and evaluations of Project Agila's sandbox experiments by the end of the year.
In February, BSP Governor Eli Remolona provided insights into the CBDC project, clarifying that it will operate on a private payment and bank-owned settlement system rather than a public blockchain. The CBDC is designed to complement cash and will be a wholesale CBDC (wCBDC), targeting licensed banks and intermediaries for wholesale transactions rather than retail use.
The initial pilot phase of the project concluded successfully last July, with the BSP selecting Hyperledger Fabric as the underlying technology for its distributed ledger. The bank aims to explore the potential of CBDC technology to streamline and automate payment systems through its programmability features.
The launch of the wholesale CBDC is expected to enhance the efficiency of interbank transactions, securities trading, and cross-border payments. The BSP's strategic move to adopt this innovative payment instrument reflects its commitment to embracing digital transformation in the financial sector.
The Philippines' initiative positions it alongside other nations exploring the benefits of digital currencies, aiming to modernize its financial infrastructure and ensure robust, secure, and efficient payment systems for the future.
