Central Bank of the Philippines to Complete Wholesale CBDC Pilot This Year, Hints at Securities Focused Use Case

Central Bank of Philippines Profiles Using Wholesale CBDC for Securities Settlements

The Central Bank of the Philippines revealed that its ongoing wholesale central bank digital currency ( CBDC) pilot will be concluded this year, as it prepares to issue a commercial version of this currency.

Deputy Governor for Payments and Currency Management Sector Mamerto Tangonan detailed that the end of this pilot, Project Agila, was projected to end later this year. Tangonan explained that the pilot “was designed for learning exercise in order to put us in a better position to assess whether this technology is what, itself, claims to be.”

The proposal for a wholesale CBDC was first presented in 2022 but then abandoned due to the stance of former Governor Benjamin Diokno, who prioritized perfecting the already existing digital payments infrastructure over CBDC experimentation.

Nonetheless, Project Agila was revived and is now testing payments between six financial institutions as part of the Phillipinnian banking system.

Tangonan added that the pilot will also be useful to determine if this kind of tech can democratize access to the securities market. This would allow more actors to manage and experiment with securities with lower fees and amounts that retail investors can manage.

He stressed:

We envision a Philippines where access to securities and similar investment instruments can be democratized, meaning they could be purchased for smaller issue sizes and much much lower fees.

Eli Remolona Jr, governor of the central bank, stated in February that the bank was ready to develop a blockchainless wholesale CBDC in the next two years. Remolona Jr. stated that this currency would leverage the central bank payment rails because other central banks had tried blockchain “but it didn’t go well.”

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