The Bangko Sentral ng Pilipinas (BSP) is thinking of tapping the possibility of issuing its own digital currency. According to the BSP Governor Nestor A. Espenilla, Jr. it is currently studying its development in other countries and its impact on the local financial system.
In his speech, the BSP governor stated that it is looking at the possibility of central bank-issued digital currencies (CBDCs) but is not yet ready to pursue it in the country. A number of industry experts also stressed that issuing CBDCs in the Philippines may disrupt its monetary policy operations.
Mr. Espenilla said that the bank is carefully probing on CBDCs and “what it means for the supply of credit and the impact on the financial system,”. He added that they are giving it a “thorough consideration”.
A blockchain expert and the head of Crypto Valley Association in Switzerland, Ms. Cecilia Mueller-Chen, shared that different central banks have different speed in which to assess whether it will need to issue an e-currency that may supplement its current legal tender.
“It’s actually quite a complex issue because there are issues about how you conduct monetary policy… When you issue e-currency that could possibly be traded or use in some kind of payments system, we need to track it as well,” – Ms. Cecilia Mueller-Chen, Head of Crypto Valley Association, Switzerland
The chairman of Blockchain Association of the Philippines (BAP), Mr. Justo Ortiz, shared his thoughts on the matter. He said that the country could benefit from a wider use of cryptocurrencies but stressed that it will need a lot of research.
“It’s definitely feasible, but our central bank needs to believe… Our economic circumstance might be different — these… decisions need a lot of research because it needs to be sort of positive or additive to their (BSP) mandate,” – Mr. Justo Ortiz, Chairman, BAP
He also noted on how the Bank of Canada used the technology to reduce cash. He said that our own central bank has the same goal of digitalization and moving transactions electronically and added:
“Like everything… it has to be very thoroughly examined and has to be thoroughly researched supporting it.” – Mr. Justo Ortiz, Chairman, BAP
The countries that are currently using cryptocurrencies as a form of legal payment are Ecuador, Senegal, Venezuela, and the Marshall Islands.
Recently, the Bangko Sentral ng Pilipinas awarded two new virtual currency exchange license in July 2018 to ETranss and Virtual Currency Philippines Inc (VCPI). This makes the total license holders five along with Betur, Inc (known as Coins.ph), Rebittance, Inc (wholly owned subsidiary of SCI Ventures), and Bloom Solutions.
It is also previously reported that the BSP will receive first-hand legislation information from International Decentralized Association of Cryptocurrency and Blockchain (IDACB). The central bank is said to get information on regulations about blockchain technology from the government of the 87 countries united by the association.
Source: Business World