The Bangko Sentral ng Pilipinas (BSP), via Governor Benjamin Diokno in a statement on Friday, said that the central bank digital currency (CBDC) is set for an experimental trial, beginning in the fourth quarter of 2022.
CBDC will bring the central bank’s fiat currency into digital format and will take advantage of the blockchain, the same technology that powers cryptocurrencies, like Bitcoin and Ethereum.
During a conference with the Asian Development Bank Institute, the central bank highlighted the CBDC’s potential to improve financial transactions between banks and non-bank financial institutions.
While regarded as an experiment, the initiative makes for a clear indication regarding the growing embrace of blockchain technology in finance, leading to a potential launch of the CBDC soon, as per BSP.
Unlike cryptocurrencies, however, CBDC will have the backing of respective governments and central banks and will be centralized as is the tradition in conventional banking.
Source: ABS-CBN News