Eli Remolona, head of the Bangko Sentral ng Pilipinas (BSP), revealed that the central bank aims to introduce a wholesale digital currency shortly.
Speaking to Inquirer.net on February 12, Remolona explained that the BSP intends to develop this digital currency without blockchain technology.
Remolona explained, “The decision is to limit it to wholesale — banks will be the only counterparties, and then, retail will ride on them.”
Instead, the central bank’s digital currency will be managed directly by the bank itself, operating within a payment and settlement system it controls. The BSP aims to create a wholesale CBDC, which will be managed through commercial banks.
The central bank has concerns about potential issues linked to a retail CBDC, like bypassing intermediaries, increased risk of bank runs during economic downturns, and bolstering the central bank’s power.
Remolona highlighted Sweden and China as examples of countries developing CBDCs to supplement cash and compete with cryptocurrencies. He is confident that the Philippines can follow suit and create its own CBDC during his tenure as governor. When asked by journalists, he affirmed that this development could occur within the next two years.
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