Philippines Set to Launch Central Bank Digital Currency by 2029

The Philippines’ central bank is reportedly set to issue its wholesale central bank digital currency (CBDC) by 2029.

Deputy Governor Mamerto Tangonan said that Project Agila, the bank’s wholesale CBDC initiative, is nearing the proof-of-concept phase completion, The Philippine Star reported Thursday.

“The governor is very early in his term and we’re already about to conclude proof of concept. This is an innovative payment instrument,” he said at a press briefing.

The Bangko Sentral ng Pilipinas (BSP) initiated Project Agila, a two-phase CBDC exploration, in response to global interest in tokenized fiat currencies. It was initially launched in Dec. 2022 as Project CBDCPh. Then, it was rebranded in Sept. 2023, to investigate streamlining interbank, securities, and cross-border transactions.

Philippines’ Wholesale CBDC to Operate on Bank-Owned Network

In February, BSP Governor Eli Remolona shared a few details about the Philippine CBDC project. He said it would operate on a private payment and bank-owned settlement system, rather than on a public blockchain.

He further emphasized that it would be a wholesale CBDC (wCBDC). This means it is intended for licensed banks and intermediaries in wholesale transactions, rather than being available for retail use. Remolona also mentioned that the goal is to create a system where the CBDC complements cash.

The BSP successfully concluded the initial pilot phase last July selecting Hyperledger Fabric as the underlying technology for its distributed ledger.

BSP To Prepare Project Agila Report

Toward the end of the year, the bank is set to release a report on the findings and evaluation of its Project Agila sandbox experiments. Additionally, the BSP will examine CBDC technology potential to streamline and automate payment systems through its programmability features.

Separately, in May, the BSP authorized controlled testing of a nationally-backed stablecoin directly tied to the Philippine peso. The main goal of this 1:1 pegging is to ensure a smooth transition between the digital and physical forms of the Philippine peso.