Global: Philippines Completes Trial for Wholesale CBDC

The Bangko Sentral ng Pilipinas (BSP) has successfully concluded its Proof of Concept (PoC) trials for Project Agila, the Philippines’ wholesale central bank digital currency (wCBDC) initiative. The trial, conducted with participation from local financial institutions, focused on testing out-of-hours interbank payments, including transactions during evenings, weekends, and holidays.

BSP Governor Eli M. Remolona, Jr. highlighted the transformative potential of wCBDCs, stating, “Wholesale CBDCs are expected to enhance liquidity management, reduce settlement risks, and support financial stability.” He further emphasized that insights from the project would shape the BSP’s broader CBDC roadmap, aiming to leverage emerging technologies to enhance the efficiency and resilience of the national payment system.

Key Objectives and Next Steps

Although specific findings from the trial are yet to be published, BSP has signaled its intent to deploy a wholesale CBDC during Governor Remolona’s tenure, which concludes in 2029. Initial timelines suggest a potential launch as early as 2025 or 2026.

The wCBDC aims to achieve several critical objectives, including:

1. Out-of-Hours Payments: Enabling interbank settlements outside traditional operating hours.
2. Securities Settlement: Streamlining processes for financial instruments.
3. Cross-Border Payments: Enhancing efficiency and reducing costs in international transactions.

The central bank’s participation as an observer in the mBridge DLT cross-border payment system—a collaboration involving the central banks of China, Hong Kong, Saudi Arabia, Thailand, and the UAE—underscores its commitment to exploring the global interoperability of CBDCs.

Technology Selection

During 2023, BSP conducted evaluations of various blockchain technologies, ultimately selecting Hyperledger Fabric as the foundational platform for Project Agila.

Significance of the Initiative

The Project Agila trial represents a practical and forward-looking step in the adoption of wCBDCs, focusing on immediate and real-world applications such as improving interbank payment efficiency and bolstering financial stability. Unlike some exploratory CBDC projects, this initiative reflects BSP’s clear intent to integrate digital currencies into the Philippine financial system in the near term.

As the Philippines moves closer to implementing a wholesale CBDC, this development positions the country to enhance its payment infrastructure, strengthen financial resilience, and align with global trends in digital currency adoption.