Philippines Advances Plans for Wholesale CBDC with Project Agila

In a recent press conference held on March 6, the Bangko Sentral ng Pilipinas (BSP) shared further insights into its ambitious plans to explore the wholesale central bank digital currency (wCBDC) of the Philippines. 

Mamerto Tangonan, the BSP’s Deputy Governor for Payments and Currency Management Sector, unveiled details about the ongoing pilot project named Project Agila, set to conclude by the year’s end.

As reported earlier by TheCoinRise, the Philippine central bank is strongly in favor of stablecoins and believes that they can revolutionize the existing monetary system and enable “affordable and faster” cross-border transfers. 

Philippines Advances on Project Agila

Describing Project Agila as a “learning exercise,” Tangonan emphasized the BSP’s vision for a future where access to securities and investment instruments is democratized. He envisions a scenario where individuals in Philippines, irrespective of their financial status, can not only dream but also own securities. The goal is to enable smaller issue sizes and significantly lower fees, making investment opportunities accessible to every citizen. 

It is important to note that the country is taking crypto very seriously and recently banned Binance for operating illegally.

Participation from Six Domestic Banks

Six prominent domestic banks—BDO Unibank, China Banking Corp., Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines—are actively participating in the wCBDC pilot alongside the BSP. The primary focus of the project is the seamless transfer of funds among these banks using wCBDC.

Tangonan shed light on the broader aspirations of the BSP, stating, “But we also like to see if this wholesale CBDC can be used for higher value-adding services like securities settlement.” This hints at the potential expansion of wCBDC functionality beyond basic fund transfers to more intricate financial services.

Philippines is Only Considering a wCBDC

BSP Governor Eli Remolona, speaking in February, clarified the central bank’s cautious approach, emphasizing that they are only considering a wCBDC. This decision stems from concerns about bank disintermediation and other challenges associated with the issuance of a retail CBDC. Remolona emphasized that the proposed wCBDC would not operate on a blockchain.

Exploring Benefits of CBDCs

The Philippines initially expressed interest in issuing a CBDC in 2020. Following a positive initial assessment of a wCBDC, the BSP announced its pilot tests, known as Project CBDCPh, in 2022. The current Project Agila marks a significant step forward in the country’s exploration of the potential benefits and applications of a wholesale central bank digital currency.

Notably, in 2023, the Philippines participated in a pilot study involving the Digital Dollar Project, Western Union, and BDO Unibank to explore the use of retail CBDC in remittances. The study revealed the potential for cost reduction, increased transparency, and heightened competition but faced challenges in transaction speed due to remittances arriving after working hours.