The Philippines’ central bank and the Alliance for Financial Inclusion, BSP Governor Benjamin Diokno announced the rollout of Project CBDCPh, a pilot implementation of a central bank digital currency (CBDC) for the country.
It has been reported that according to Diokno, the project aims to improve “the payment system’s safety, resiliency, and efficiency.”
“The project aims to build organizational capacity and hands-on knowledge of key aspects of CBDC that are relevant for a use case around addressing frictions in the national payment system.”
However, Diokno also highlighted the potential impact of CBDCs. The BSP governor noted that a CBDC would be able to help in government-run cash assistance programs. He underscored that the pandemic showed the utility of account-based financial assistance distribution. Diokno believes that this can be used to “provide immediate support to the most vulnerable segments of society.”
The report said that while there are many potential benefits, the governor also highlighted potential difficulties that the project may encounter such as the lack of technological infrastructure.
“Monetary authorities and regulators will need to build the requisite skills and technological capacity to effectively implement and manage the risks of CBDC issuance.”
Thus, in the United States, Lael Brainard, a member of the Federal Reserve’s Board of Governors, urged the US to spearhead research and policies when it comes to CBDCs. Citing developments in China, Brainard says that the cross-border payment dominance of the US dollar could be impacted by CBDC developments in other countries.