The Philippines is on track to issue its own wholesale central bank digital currency (CBDC) by 2029 or earlier, an official of the Bangko Sentral ng Pilipinas (BSP) says.

In a briefing last week, BSP deputy governor Mamerto Tangonan said the BSP’s wholesale CBDC project, dubbed Project Agila, is nearing the end of proof-of-concept phase. 

“The governor [Eli Remolona] is very early in his term and we’re already about to conclude proof of concept,” Tangonan says, adding that the wholesale CBDC is expected to be rolled out within Remolona’s current term, which ends in 2029. 

Earlier in September, the BSP announced that it had chosen Hyperledger Fabric as its technology partner for Project Agila. The central bank also said it has chosen distributed ledger technology (DLT) for the project, a digital system for recording asset transactions in multiple places simultaneously. 

In addition to the choice of a technology partner, the BSP also says it is currently conducting two test runs of existing sandbox experiments related to Project Agila. 

“In a matter of seven weeks, we were able to complete the first step of the test run and we have tested the distributed ledger technology as well as the tokenization of wholesale CBDC,” says Bridget Rose Mesina-Romero, director of the BSP’s payments policy and development department, adding that the BSP will issue a report on their findings and assessments related to the CBDC sandbox tests.

The BSP has tapped several Philippine lenders to participate in Project Agila, including BDO Unibank, China Banking Corporation, Land Bank of the Philippines, Rizal Commercial Banking Corporation, Union Bank of the Philippines, and Maya Philippines. 

On the other hand, Citibank, China Bank Savings, Wealth Development Bank Corporation, and SeaBank Philippines will serve as observing financial institutions.

Tangonan also says the BSP is continuing to monitor how the participating lenders, as well as the BSP, are understanding how to utilize CBDCs while ensuring they are safe and being effectively managed.

“If [this current phase] brings the literacy and the knowledge of both the BSP and banks to a level that they are ready to launch it, then only at such time will we make a decision whether to go or not go,” he says.