BSP monitoring CBDCs
“We are currently preparing to undertake a study of its existing payments and settlement system vis-a-vis its digitalization agenda to assess any gaps that may be addressed by a CBDC, and its value proposition against existing payment system”
Bangko Sentral ng Pilipinas (BSP) announced it was examining CBDCs and monitoring global progress in that field.
The announcement comes as many central banks including in Russia, Brazil, Indonesia, Turkey and more have declared clear interests in CBDCs.
The BSP published an in-depth analysis of CBDCs in a long document.
Central bank digital currency (CBDC) has elicited immense interest among central banks in recent years. This is evident in the increasing number of central banks engaged in some form of work on CBDC. Many are undertaking conceptual research while some have progressed to proofof-concept experiments. A smaller number of central banks have already developed and implemented pilot tests of their CBDC. Various factors underpin the interest in CBDC. These include: i) rapid technological innovations in the financial sector; ii) emergence of new entrants into payment services and intermediation; iii) decline in the use of cash in some countries; and iv) increasing interest on privately-issued digital tokens (BIS, 2018).
The BSP did highlight the possible lending problem with disintermediation of the financial system if CBDCs weaken the roles of retail banks.