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BSP Governor Benjamin Diokno. INQUIRER file photo
MANILA, Philippines – The central bank recently completed its study on digital currencies as a possible future alternative to the current system of physical peso banknotes as a means of transferring value, but the country’s top monetary regulator said it is unlikely that one will be introduced. in the short term.
At a press conference, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said that planners who closely examined the central bank’s proposed digital currency recommended continuing research, capacity development and establishment of networks with central banks and institutions that are also conducting research on this scheme.
“The initiative aims to allow the BSP to keep pace and improve its readiness to adapt and evolve amid rapid technological developments,” Diokno said, adding that its introduction will likely occur beyond its current mandate.
The study is exploratory in nature. It is in line with BSP’s Digital Payment Transformation Roadmap, which aims to convert at least 50 percent of retail payments into digital form and that at least 70 percent of adult Filipinos should have a bank account by 2023.
According to the study, the current payment system could be investigated further, including possible areas for improvement; privately issued digital currencies in the Philippines, covering its business models and regulatory formulation using industry sandboxes; and evolution of digital currency among central banks.
Meanwhile, capacity building can be done through workshops or roundtables conducted by other institutions and experts in the field, or real immersions in digital currency projects.
The BSP can also benefit from technical assistance from international institutions such as the International Monetary Fund or the Bank for International Settlements.
In addition, to establish networks, the study said that BSP can consult with peer central banks for updates on their research related to digital currency; o Consider collaborative experimentation with central banks, financial institutions, or international organizations conducting similar research or related initiatives.
The exploratory study of the BSP, which was carried out by a composite technical working group, covered the basic concepts and topics around digital currencies and the implications and risks from the perspectives of monetary policy, financial supervision, payments and settlement and financial inclusion, as well as laws and regulations.
It also presents the experiences of other central banks that have undertaken related research initiatives on digital currencies.
Diokno emphasized that the current crop of digital currencies proliferating online is, by nature, inferior to any digital currency that will be issued by the central bank. This is especially so because a digital currency issued by a central bank will be an officially recognized method of storing value that will be, by law, acceptable as payment for goods and services, among others.
JPV
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