Bangko Sentral ng Pilipinas identified cross‑border payments, remittances, institutional transfers, and securities settlement as top use cases for a wholesale central bank digital currency.
The central bank’s Project Agila pilot examined how a wholesale CBDC could close gaps in the payments ecosystem and lower transaction costs.
Governor Eli M. Remolona, Jr. said wholesale CBDCs can improve payment‑infrastructure efficiency and enable new services that meet evolving national needs.
Unlike retail digital currencies, wholesale CBDCs are direct liabilities of the central bank and are intended for banks and other financial institutions to settle interbank payments, securities trades, and cross‑border transfers.
The proposed system would resemble the existing real‑time gross settlement (RTGS) framework, with each bank holding an account at the BSP, but would employ distributed ledger technology to automate processes, speed processing, and cut costs.
For cross‑border payments, the report highlighted remittances and interbank transactions as the most immediate beneficiaries, noting that overseas remittances represent roughly 10 % of GDP and banks’ cross‑border activity accounts for about 14 % of total banking assets.
Faster, cheaper settlement of remittances could raise recipients’ disposable income and stimulate domestic consumption, while reduced bank costs would enhance international operations.
Even modest efficiency gains of 10‑20 % in these high‑volume flows could generate substantial economic benefits. Such gains would strengthen the country’s external balances and improve competitiveness.
Distributed ledger and tokenization would also permit inter‑institutional transfers outside regular business hours, improving liquidity management through real‑time, programmable settlements.
Extended‑hours availability could support financial inclusion by allowing payment service providers to offer faster, lower‑cost services to end‑users.
The BSP sees wholesale CBDC as a potential continuity solution for its real‑time gross settlement system, enhancing resilience and enabling integration with other payment infrastructures.
Secure interoperability with the RTGS and the National Retail Payment System could broaden access, improve fintech integration, and deliver tailored services to underserved communities.
Tokenizing financial securities on a wholesale CBDC platform would narrow the gap between trade execution and final settlement, reducing settlement risk and increasing market liquidity.
Lower costs and greater transparency are expected to attract more investors and boost capital inflows as the tokenized securities market matures.
The central bank cautioned that wholesale CBDCs introduce technology, operational, systemic, and innovation risks that require robust governance, layered security, bespoke risk management, and adaptive supervisory frameworks.
Careful design is essential to preserve financial stability, ensure effective monetary‑policy transmission, and support macroeconomic growth.
Findings from Project Agila will inform the BSP’s forthcoming CBDC roadmap, which will define initiatives, stakeholder roles, timelines, and performance metrics for testing and developing use cases.
The roadmap will set policy goals, expected outcomes, and success criteria for each application, guiding the evolution of the national payments system.
The BSP envisions wholesale CBDCs reshaping financial markets and cross‑border payments through speed, efficiency, and trust, and will continue exploring tokenization to streamline trade payments.
Coordinated effort among the payments industry, market infrastructures, and government agencies aims to create a unified platform and a forward‑looking blueprint for the Philippines’ digital economy.
