April 19, 2024
Latest Cryptocurrency News

Philippines Plans for Wholesale CBDC Within the Next Two Years

In an exclusive interview with Inquirer.net on February 12, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona disclosed the central bank’s ambitious plan to introduce a wholesale Central Bank Digital Currency (CBDC) in the coming years. Remolona emphasized that the BSP’s CBDC initiative would differ from others, as it would not involve blockchain technology.

“Other central banks have tried blockchain, but it didn’t go well,” Remolona explained, signaling the BSP’s departure from the conventional approach. Instead, the CBDC will leverage a payment and settlement system directly owned by the central bank. The focus will be on a wholesale CBDC, with banks acting as intermediaries in the process.

Remolona expressed skepticism about the potential risks associated with retail CBDCs, such as disintermediation, bank runs during financial stress, and the central bank’s expanding influence. He clarified the decision to limit the CBDC to wholesale transactions, stating, “Banks will be the only counterparties, and then, retail will ride on them.”

Drawing inspiration from Sweden and China, where CBDCs are being developed as digital alternatives to cash and “rival cryptocurrencies,” Remolona expressed confidence that the Philippines could replicate their successful experiences. He stated that the CBDC would “definitely happen” within his term as governor, with the possibility of implementation in the next two years.

In a related context, the Philippines has maintained a firm stance on the cryptocurrency industry, taking measures to protect the local market from foreign players. In December 2023, the Philippines Securities and Exchange Commission (SEC) reinforced its ban on Binance due to the exchange’s unregistered activities in the country.

Despite the warnings, Binance continues to be a major cryptocurrency trading platform in the Philippines, with users praising its local services as “reliable and stable” on social media. Responding to public criticism, SEC Chair Kelvin Lee highlighted the compliance costs evaded by Binance and urged investors to opt for one of the 17 registered virtual asset service providers in the country.

Image by Freepik

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