The Bangko Sentral ng Pilipinas (BSP) is making significant strides towards launching its own central bank digital currency (CBDC), codenamed Project Agila. The project is expected to conclude its proof-of-concept phase, paving the way for a potential rollout earlier than initially anticipated.
In a recent press briefing, BSP Deputy Governor Mamerto E. Tangonan expressed optimism about the project’s timeline. He said that the CBDC could be launched within the first half of BSP Governor Eli M. Remolona Jr.’s term, which extends until 2029.
However, Deputy Governor Tangonan emphasized the importance of user adoption, highlighting the need for both banks and the BSP to be comfortable with the CBDC’s usability and management before launch.
Project Agila is a learning exercise for the BSP and participating financial institutions. By its completion, both entities will have a deeper understanding of CBDC technology and its wholesale applications.
The BSP has identified several potential use cases for the CBDC, including:
- Liquidity Management: Enabling transactions between banks even on non-banking days.
- Securities Settlement: Potentially streamlining the process for a “near-instantaneous” settlement, boosting capital markets.
- Cross-Border Payments: The BSP is exploring collaboration with the Bank for International Settlements’ (BIS) multi-CBDC platform, Project mBridge, for this purpose.
Phase one of the project, completed in 2023, saw the selection of Hyperledger Fabric’s distributed ledger technology (DLT) for the BSP’s sandbox experiments.
These tests aim to assess the business viability of the technology in creating a more efficient and secure payment system. The BSP also explored the programmability features of CBDC technology.
A final report for all findings and assessments from Project Agila’s sandbox experiments is expected by the end of the year. The BSP has collaborated with international organizations like the International Monetary Fund and the BIS Innovation Hub for guidance on technical aspects, risk management, and governance throughout the pilot project.
