The Philippines’ central bank is reportedly set to issue a wholesale central bank digital currency (CBDC) by 2029.
Deputy Governor Mamerto Tangonan said Project Agila, the bank’s wholesale CBDC initiative, is nearing completion of the proof-of-concept phase, The Philippine Star reported Thursday.
“The governor has started his term at a very early stage, and we will soon complete the proof of concept. This is an innovative payment instrument,” he said at a press conference.
TheBangko Sentral ng Pilipinas (BSP) launched Project Agila, a two-phase CBDC study, in response to global interest in tokenized fiat currencies. Originally launched in December 2022 as the CBDCPh Project, it was subsequently renamed in September 2023 to explore streamlining interbank, securities and cross-border transactions.
CBDC in the Philippines will begin operating on a bank-owned network
In February, BSP Governor Eli Remolona shared some details about the Philippine CBDC project. He said it will operate on a bank-owned private payment and settlement system rather than a public blockchain.
He further stressed that it will be a wholesale CBDC (wCBDC). This means that it is intended for licensed banks and intermediaries for wholesale transactions, and not available for retail use. Remolona also mentioned that the goal is to create a system in which CBDC complements cash.
Last July, BSP successfully completed an initial pilot phase, selecting Hyperledger Fabric as the base technology for its distributed ledger .
BSP will prepare a report on the Agila project
At the end of the year, the bank is expected to publish a report on the results and evaluation of experiments under the Agila project. In addition, BSP will explore the potential of CBDC technology to streamline and automate payment systems through programmability features.
Separately, in May, the BSP authorized the controlled testing of a domestically backed stablecoin directly linked to the Philippine peso. The main objective of this 1:1 arrangement is to ensure a smooth transition between the digital and physical forms of the Philippine peso.
