6 Banks Revealed in Project Agila CBDC Pilot Concluding by End-2024

6 Banks Revealed in Project Agila CBDC Pilot Concluding by End-2024

by March 11, 2024

In a recent press briefing, Deputy Governor Mamerto Tangonan disclosed that the Bangko Sentral ng Pilipinas (BSP) is poised to complete the trial phase of Project Agila, a wholesale Central Bank Digital Currency (CBDC) initiative, by the end of 2024.

The project aims to facilitate digital currency transactions among commercial banks and financial institutions for various functions, such as interbank payments, securities transactions, and cross-border payments. The pilot scheme, Deputy Governor Tangonan noted, is intended as an exploratory exercise to assess the technology’s viability and its potential to improve financial operations.

Six prominent domestic financial institutions — BDO Unibank Inc., China Banking Corp., LandBank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines Inc. — are participating in this pilot to examine the CBDC’s functionality and its prospective advantages in streamlining financial services, particularly in securities settlements.

Mamerto E. Tangonan

Mamerto E. Tangonan

“We are using it to transfer funds among these financial institutions. But we also like to see if this wholesale CBDC can be used for higher value-adding services like securities settlement[…] We envision a Philippines where access to securities and similar investment instruments can be democratised, meaning they could be purchased for smaller issue sizes and much lower fees so that any Juan or Maria cannot only dream but actually own securities,”

Deputy Governor Tangonan remarked, underscoring the project’s goal to widen access to financial instruments.

BSP Governor Eli Remolona Jr. has indicated that, following the pilot’s conclusion, a thorough evaluation will be conducted to consider a nationwide rollout of wholesale CBDCs, which could significantly alter the financial landscape by providing a secure and efficient digital payment system.

Distinctively, the project does not utilise blockchain technology. Instead, it evaluates the use of PhilPaSSPlus, BSP’s real-time gross settlement payment system, as a potential foundation for the country’s digital currency. This approach is reflective of the BSP’s aim to maintain a secure and efficient financial environment.

Project Agila marks an important development in the Philippines’ adoption of digital financial technologies, initiated in December 2020 when the notion of a CBDC first garnered legislative interest. Despite initial hesitancy, the BSP’s progressive engagement with digital currencies is evident through the formal initiation of the CBDC pilot project and ongoing consultations with financial stakeholders.

As the global financial community intensifies conversations around the implementation of digital currencies, the Philippines’ Project Agila represents the nation’s forward-looking efforts in exploring innovative financial technologies to potentially enhance economic inclusivity and efficiency for its populace.

Featured image credit: Edited from Freepik