Philippine central bank explores wholesale CBDC

Using it for financial securities transactions could reduce settlement risks, the BSP said.

The Bangko Sentral ng Pilipinas (BSP) have noted the potential application of wholesale central bank digital currency (CBDC) for settlement of financial securities and large-value cross-border payments.

“Wholesale CBDCs can enhance efficiency in the payments infrastructure and develop new financial services that could address evolving needs in the national payments ecosystem,” said BSP governor Eli M. Remolona, Jr. in an online statement in July.

Adopting wholesale CBDCs for financial securities transactions could significantly reduce settlement risks by narrowing the time gap between trade execution and final settlement, the BSP said, based on its “Project Agila” report.

A wholesale CBDC is a type of CBDC designed for use by commercial banks and other financial institutions.

In the event that banks use a wholesale CBDC, they will have to maintain an account with the BSP, much like the current real-time gross settlement (RTGS) system, the Philippine central bank said.