Philippine Central Bank Working On CBDC, Prepares To Launch Digital Money In 2029

The Central Bank of the Philippines is working on CBDC. (Photo; Doc. TheAsianAffairs)

JAKARTA - The Central Bank of the Philippines (Bangko Sentral ng Pilipinas/BSP) is in the process of developing a wholesale digital bank (CBDC), which is planned to be launched in 2029. This initiative, known as the Agisa Project, is now nearing the final stages of the concept trial.

The Deputy Governor of BSP, Mamerto Tangonan, revealed that this project is an innovative step in the payment system. "The governor has just started his term of office, and we are almost finalizing the proof of concept stage. This is an innovative payment instrument," Tangonan said at a press conference reported by The Philippine Star.

The Agira project, which began in December 2022 as a CBDCPh Project, aims to respond to the increasing global interest in tokenized fiat currencies. The project was rebranded in September 2023 to focus more on simplifying transactions between banks, securities, and across countries.

Based on information submitted by the Governor of BSP, Eli Remolona, in February, the CBDC will operate in the payment system owned by the bank, not on public blockchain. Remolona emphasized that this is a wholesale CBDC, which means it is intended for licensed banks and intermediaries in wholesale transactions, not for retail use.

The goal is to create a system where CBDC can complete cash, added Remolona. BSP also managed to complete the initial pilot phase last July, by selecting Hyperledger Fabric as the basic technology for distributed ledgers.

A Crazy Project Report

Towards the end of the year, BSP plans to release a report containing findings and evaluations of the Agira Project sandbox experiment. This report will evaluate the potential of CBDC technology to simplify and automate payment systems through programmable features.

In addition, last May, BSP also granted permission for limited testing of state-backed stablecoins directly tied to Philippine pesos. The main goal of this 1:1 binding is to ensure a smooth transition between the digital and physical forms of Philippine pesos. The project demonstrates BSP's commitment to strengthening the Philippine financial system and embracing innovation in the digital era.