Philippines Likely to Issue Wholesale Central Bank Digital Currency Within Two Years

According to CoinDesk, the Philippines is expected to issue a wholesale central bank digital currency (CBDC) within the next two years. However, the country does not plan on issuing a retail CBDC due to concerns that it may cause bank runs. Central bank Governor Eli Remolona Jr stated that the Philippines will not use blockchain or digital ledger technology for its CBDC, as other central banks' attempts with the technology have not been successful. CBDCs are digital tokens issued by central banks, with retail CBDCs being used by the general public and wholesale CBDCs reserved for institutional use. The Philippines central bank began an exploratory study into CBDCs in 2020. The Bank for International Settlements, which coordinates between central banks worldwide, warned in November that institutions are not adequately prepared for the risks posed by CBDCs. The Bangko Sentral ng Pilipinas (BSP) acknowledges that a retail CBDC could worsen bank runs during times of financial stress, while a wholesale version could enhance the efficiency and safety of domestic and cross-border payments. Governor Remolona confirmed the decision to limit the CBDC to wholesale use only, with no retail option.