The Governor of Bangko Sentral ng Pilipinas (BSP), Eli Remolona, has revealed the central bank’s intention to introduce a wholesale central bank digital currency (CBDC) in the next few years.
Speaking to a local newspaper, Inquirer.net, on Feb. 12, Remolona explained the details behind the BSP’s plan to develop a CBDC. The central bank will not use blockchain technology in the project, according to its head:
“Other central banks have tried blockchain, but it didn’t go well.”
Instead, the CBDC will operate on a payment and settlement system owned by the central bank. The BSP will focus on a wholesale CBDC, which will be mediated by banks.
The central bank is skeptical about potential problems with the retail CBDC, including disintermediation, bank runs during financial stress and the further magnifying of the central bank's footprint. Remolona explained:
“The decision is to limit it to wholesale — banks will be the only counterparties and then, retail will ride on them.”
Remolona pointed to the examples of Sweden and China, which are developing CBDCs as a digital complement to cash and “rival cryptocurrencies.” He believes the Philippines can replicate their experience.
According to the official, the CBDC “would definitely happen” within his term as governor. Responding to the journalist’s questions, he confirmed that it could happen in the next two years.
The Philippines takes a hard stance on the crypto industry, defending the local market from foreign players. In December 2023, the Philippines Securities and Exchange Commission (SEC) reiterated its ban on Binance due to the exchange’s unregistered activity in the country.
Despite multiple warnings, Binance has apparently remained one of the major crypto trading platforms in the Philippines, with some users describing its local services as “reliable and stable” on social media.
Responding to the public criticism and the arguments on the cost attractiveness of Binance for local investors, SEC Chair Kelvin Lee pointed out the factors of compliance costs evaded by Binance and advised the investors to use one of the 17 registered virtual asset service providers.