Philippine Central Bank Governor Plans Launch of Digital Currency
Summary:
Eli Remolona Jr., the Governor of Bangko Sentral ng Pilipinas (BSP), plans to launch a wholesale central bank digital currency (CBDC) within his tenure. With the Philippine's central bank opting not to use blockchain technology for this project, the CBDC would operate on their own Payment and Settlement System. With banks serving as sole intermediaries in the scheme, individual, or retail customers will use the banks as riding entities. Drawing from examples in Sweden and China, Remolona expects this CBDC to rival cryptocurrencies. Despite resitance against international crypto entities, the Baninance continues to operate despite warnings from the Philippines Securities and Exchange Commission.
Eli Remolona Jr., the Governor of the Philippine Central Bank, Bangko Sentral ng Pilipinas (BSP), has projected the launch of a wholesale central bank digital currency (CBDC) within his tenure. Discussing this development with a local media outlet, the Inquirer, on Feb. 12, Remolona outlined the BSP's approach towards creating a CBDC. Contrary to several global central banks, BSP will abstain from harnessing blockchain technology in this endeavor, owing to prior unsuccessful attempts by others. Instead, the BSP plans to base the CBDC on its proprietary Payment and Settlement System. The endeavor will primarily encompass a wholesale CBDC, brokered via traditional banking entities. However, the BSP harbors reservations regarding a potential retail CBDC due to anticipated concerns such as disintermediation, potential bank runs during fiscal upheavals, and an amplified central bank footprint. The approach is intended to confine it to wholesale with banks serving as the solitary intermediaries, with retail piggybacking on these banks, Remolona elaborated. He cited the experiences of Sweden and China with their CBDC as a digital equivalent to cash and a contender to cryptocurrencies, with the Philippines possibly emulating their path. The highest-ranking official stated that the CBDC was assured to become a reality during his term, with a potential announcement within the next two years. The critique of a hardline approach by the Philippines towards cryptocurrencies was rebutted, showcasing a defense against imports by overseas entities upon the domestic market. In December 2023, the Philippines Securities and Exchange Commission (SEC) renewed its prohibition against Binance due to the exchange undertaking unaccredited operations in the Philippines. Binance continues to maintain a substantial presence as a key crypto trading platform in the country, despite several warnings, with some users showcasing its services as dependable and constant on social networks. SEC chair, Kelvin Lee, amidst the public uproar and debates over the cost-effective nature of Binance for domestic investors, emphasized the compliance costs avoided by Binance and suggested investors to resort to one of the 17 officially registered virtual asset service providers.
Published At
2/12/2024 12:37:29 PM
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