The Philippines is on the verge of a significant financial transformation with the potential introduction of a wholesale central bank digital currency (CBDC) by 2029.
As Project Agila, spearheaded by the Bangko Sentral ng Pilipinas (BSP), progresses towards its final phase, this initiative aims to revolutionize large-scale payment systems and cross-border transactions.
Learn about the advancements, objectives, and global context surrounding this pioneering move towards digital currency.
BSP's Progress on Project Agila
On July 25, 2024, "The Philippine Star" reported that the Philippines might issue a wholesale central bank digital currency (CBDC) by 2029.
This news is based on statements by Bangko Sentral ng Pilipinas (BSP) Deputy Governor, Mr. Tangonan, who informed reporters that the proof of concept for the wholesale CBDC project, known as "Agila," is progressing well and is approaching its final phase.
BSP initiated the "Agila" project in December 2022, focusing on the verification and experimentation of a wholesale CBDC. In the first phase of the pilot project, distributed ledger technology from "Hyperledger Fabric" was employed.
A comprehensive report on all the findings and verifications related to Agila is expected to be released by the end of 2024, with detailed results to be disclosed in this report.
BSP Governor Felipe Medalla has previously suggested the possibility of issuing a wholesale CBDC by the end of his term in 2029. This recent development hints at the smooth progression of CBDC development.
Objectives and Future Plans
The primary objective of Agila is to familiarize financial institutions with CBDC technology, thereby strengthening the domestic large-scale payment system.
In addition to Agila, BSP approved the testing of a stablecoin linked to the Philippine Peso in May, aiming to invigorate digital payments and assets.
The wholesale CBDC being developed by BSP is intended mainly for use by financial institutions, offering significant advantages in cross-border transactions.
Conversely, retail CBDCs, which are designed for general public use, differ from the wholesale type. BSP has emphasized that their current development focuses solely on the wholesale model, not for general consumer use.
Global CBDC Developments
Wholesale CBDC experimentation is underway in several countries. For instance, the Swiss National Bank launched a wholesale CBDC trial project in December 2023.
In April 2024, the Bank for International Settlements (BIS) announced that it would conduct international settlement experiments using CBDCs with seven central banks, including the Bank of Japan. This signifies a global movement towards CBDC implementation.
However, there are strong opposing views on CBDCs. Former U.S. President Donald Trump recently stated at an event, "As long as I am president, CBDCs will not be issued."
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