New Blockchain Development in the Philippines
A recent post on Cointelegraph discusses the Bangko Sentral ng Pilipinas (Philippines Central Bank) opinion on the current status of cryptocurrencies. Retail crypto adoption seems to have grown significantly in the past couple of years, and the BSP wants to make sure the citizens of the Philippines are properly educated about the risks associated with blockchain and the decentralized versions of cryptoassets. Payment use cases do not appear to be decisive, rather trading and holding assets, as is the case in most of the world. Nevertheless, there are potential beneficial uses for crypto, according to the BSP.
“BSP’s focus is on the capacity of virtual assets to enhance the delivery of financial services, particularly payment and remittance services, as it has the potential to provide faster and more economical transfer of funds, both for domestic and international settings,” the BSP stated… In according to the BSP, crypto adoption in the Philippines has increased in recent years due to the COVID-19 pandemic. As such, Bitcoin (BTC) trading volumes in the Philippines reached new highs on some peer-to-peer crypto exchanges in July 2021.’
Can Blockchain Improve Financial Services?
The BSP plans no restrictions on investment levels and trading of crypto, but expects to offer regulations that enable relatively safe use. The BSP does not see decentralized cryptos as a viable payment method given the high level of volatility, continued potential for illegal activity and general lack of security protocols. The BSP considers cryptos as virtual assets rather than a currency. There is an expectation that blockchain can improve financial services in the Philippines, which is why a CBDC project is underway. The interesting thing about this CBDC project is that BSP will concentrate on wholesale rather than retail, which is different from most other CBDC projects we know of.
“The BSP continues to see great opportunities in using blockchain technology to improve the security and efficiency of financial services in the Philippines. The central bank is currently exploring the issuance of a central bank digital currency (CBDC)… The BSP plans to implement Project CBDCPh, a pilot project that will enable inter-institutional fund transfers using a wholesale CBDC platform. According to the bank, a retail CBDC is not particularly relevant for the country in the short term.’
Overview after Steve Murphydirector, commercial and corporate payment advisory service at Mercator Advisory Group.
