Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, plans to launch a Central Bank Digital Currency (CBDC) in two years, presenting it as a stable and regulated alternative to the volatile crypto market.
In contrast to other digital currencies, the Philippine CBDC will make use of the Peso Real Time Gross Settlement System, which is governed by the National Payment Systems Act, rather than blockchain technology.
BSP Governor Eli Remolona Jr. underlined that the CBDC is motivated by China’s e-CNY success to offer a safer digital currency option.
It provides a more secure option than the erratic crypto market because it is made to function with actual money.
This digital currency’s initial distribution aims to improve the security and efficiency of payment systems by focusing on commercial banks.
Remolona pointed out that the blockchain experiments conducted by other central banks had drawbacks, which supported the BSP’s different strategy.
Echoing the position of Sweden’s central bank, which emphasizes digital currency as an addition to, not a replacement for, cash, the CBDC aims to supplement cash.
Around the world, laws governing cryptocurrencies are becoming more stringent. India, for example, has introduced a closely watched CBDC and levied a 30% tax on cryptocurrency transactions.
This is a reflection of a larger movement to create regulated virtual currencies to reduce the risks involved with unregulated cryptocurrencies.
In conclusion, the Philippines is moving forward to provide a safe and effective digital payment system with a CBDC not based on blockchain.
As the world moves toward regulated digital currencies, the BSP’s dedication to financial stability and innovation is demonstrated by this action.
James Wilson is a crypto writer and researcher with over 5 years of experience in the industry. He is a graduate of the University of California, Berkeley, where he studied computer science and economics. After graduating, he worked as a software engineer at a major tech company before transitioning to a career in crypto.