As part of its efforts toward digitizing transactions, the BSP announced that they plan to launch the country’s first digital currency by the end of the year. Also known as central bank digital currency (CBDC), BSP’s proposal aims to help improve fund transfers between banks and non-bank financial institutions.

“We are going to launch that, the CBDC PH, this fourth quarter of this year. It involves a number of financial institutions. So let’s see where we go from here,” BSP Governor Benjamin Diokno said at a forum with the Asian Development Bank Institute last May 20.

Like mainstream cryptocurrencies like Bitcoin and Ethereum, the digital currency of the BSP will make use of blockchain technologies and its centralized, meaning that CBDCs will be backed by both the BSP and the government. For the pilot launch, the BSP will focus CBDCs on a wholesale level.

“The Central Bank may use the learnings from a pilot project, which we are launching this year, ascertaining how a wholesale CBDC may potentially be deployed to address pain points in cross-border payments, settlement of securities transactions, and intraday liquidity,” he added.

Part of BSP’s goal is to convert 50% of payments into digital by 2023. to make that possible, the BSP has registered 19 Virtual Asset Service Providers (VASPS), which are platforms for exchanging and trading virtual assets like NFTs and cryptocurrencies. On top of that, the BSP has also granted licenses to six digital banks in expanding financial inclusivity in the Philippines.