The following report is by CoinTelegraph:
The Governor of Bangko Sentral ng Pilipinas (BSP), Eli Remolona, has revealed the central bank’s intention to introduce a wholesale central bank digital currency (CBDC) in the next few years.
Speaking to a local newspaper, Inquirer.net, on Feb. 12, Remolona explained the details behind the BSP’s plan to develop a CBDC. The central bank will not use blockchain technology in the project, according to its head:
Other central banks have tried blockchain, but it didn’t go well.
SEE: Philippines Mandates New ‘eGov’ AI-Powered Digital IDs, Threatens Fines For Banks And Businesses
Instead, the CBDC will operate on a payment and settlement system owned by the central bank. The BSP will focus on a wholesale CBDC, which will be mediated by banks.
The central bank is skeptical about potential problems with the retail CBDC, including disintermediation, bank runs during financial stress and the further magnifying of the central bank’s footprint. Remolona explained:
The decision is to limit it to wholesale — banks will be the only counterparties and then, retail will ride on them.
Remolona pointed to the examples of Sweden and China, which are developing CBDCs as a digital complement to cash and “rival cryptocurrencies.” He believes the Philippines can replicate their experience.
According to the official, the CBDC “would definitely happen” within his term as governor. Responding to the journalist’s questions, he confirmed it could happen in the next two years.
The Philippines takes a hard stance on the crypto industry, defending the local market from foreign players. In December 2023, the Philippines Securities and Exchange Commission (SEC) reiterated its ban on Binance due to the exchange’s unregistered activity in the country.
Despite multiple warnings, Binance has apparently remained one of the major crypto trading platforms in the Philippines, with some users describing its local services as “reliable and stable” on social media.
Responding to the public criticism and the arguments on the cost attractiveness of Binance for local investors, SEC Chair Kelvin Lee pointed out the factors of compliance costs evaded by Binance and advised the investors to use one of the 17 registered virtual asset service providers.
AUTHOR COMMENTARY
The rich ruleth over the poor, and the borrower is servant to the lender.
Proverbs 22:7
Nations and their prospective central banks launching a CBDC isn’t really ‘news’ at this point, as we know that it is only a formality. But, what I found to be interesting is that they say they are not going down the blockchain route.
A wholesale CBDC is basically meant for large interbank transactions, whereas retail ones are more suited for the general public. Wholesales will not affect the money supply as much directly.
You can learn the differences between wholesale and retail here:
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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Thanks for this article, links and video clip.
Hopefully if this catches on in the U.S. too in two years, perhaps we will have already been gone for at least a year. Let’s pray that we are.
My aunt is from The Philippines. My baby cousin is half Filipino half European