Nikolas Sargeant
The Bangko Sentral ng Pilipinas (BSP) is advancing its digital currency plans, with the wholesale Central Bank Digital Currency (CBDC) expected to debut by 2029. Deputy Governor Mamerto Tangonan recently announced that Project Agila, the BSP's wholesale CBDC initiative, is nearing completion of its proof-of-concept phase.
Speaking at a press briefing, Tangonan highlighted the project's progress: "We're already about to conclude proof of concept. This is an innovative payment instrument." The BSP launched Project Agila in December 2022, initially named Project CBDCPh, to explore the potential of tokenized fiat currencies.
In September 2023, the project was rebranded and its focus expanded to investigate improvements in interbank, securities, and cross-border transactions.
BSP's CBDC: A Bank-Centric Approach
BSP Governor Eli Remolona provided insights into the CBDC project in February, revealing that it would operate on a private, bank-owned network rather than a public blockchain. Remolona emphasized that this wholesale CBDC (wCBDC) is designed for licensed banks and intermediaries in wholesale transactions, not for retail use. The governor also stressed that the CBDC is intended to complement, not replace, cash.
The central bank successfully completed the initial pilot phase last July, selecting Hyperledger Fabric as the underlying technology for its distributed ledger.
Project Agila: Next Steps and Additional Initiatives
The BSP plans to release a comprehensive report on Project Agila's sandbox experiments by the end of the year. This report will detail the findings and evaluations from the project. Additionally, the central bank will explore the CBDC technology's potential to enhance and automate payment systems through its programmability features.
In a separate but related development, the BSP authorized controlled testing of a nationally-backed stablecoin in May. This stablecoin is designed to be pegged 1:1 to the Philippine peso, aiming to facilitate seamless transitions between digital and physical forms of the national currency.
As the Philippines moves forward with its digital currency initiatives, Project Agila represents a significant step towards modernizing the country's financial infrastructure and keeping pace with global trends in digital finance.
