Hyperledger Fabric was cherrypicked to be the backbone of the Bangko Sentral ng Pilipinas’ Central Bank Digital Currency (CBDC) project, dubbed Project Agila, following the Philippines’ central banking institution’s announcement yesterday.
Known formerly as CBDCPh, Project Agila serves as BSP’s learning ground as it aims to orient itself and its partners in the financial sector toward the potential solutions that CBDC presents. Namely, the improvement in the efficiency and security of large money transactions in the country.
In collaboration with various financial institutions, BSP handpicked the Distributed Ledger Technology (DLT) to serve as the program’s cornerstone. It primarily picked DLT for its capability, ranging from recording, sharing, as well as synchronizing data and transactions across a widespread of network participants.
With great importance, DLT will enable Project Agila to be tested in specific use cases. Most notably, its capacity to facilitate fund transfers across institutions even outside of business hours or when PhilPaSSplus is out of reach.
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Before getting chosen to serve a critical role in the program, DLT underwent an exhaustive evaluation process. It includes actual demonstrations of the system, walkthrough steps, and a scoring system based on multiple metrics, such as security, accessibility, 24/7 availability, programmability, and interoperability.
Despite the Hyperledger Foundation claiming Hyperledger Fabric to be a blockchain, BSP, never mentioned the terminology. Instead, it preferred to use the term Distributed Ledger Technology. Essentially, DLT is a form of blockchain technology, on which many decentralized system is based.
A digital form of the country’s currency, CBDC is regarded as a direct liability to the BSP. It can be used by commercial banks and other financial institutions when settling interbank payments, cross-border payments, and securities payments.
As of writing, only the following are considered participatory in the program:
• BDO Unibank, Inc.
• China Banking Corp.
• Land Bank of the Philippines
• Rizal Commercial Banking Corporation
• Union Bank of the Philippines
• Maya Philippines, Inc.
Meanwhile, the following are considered observing for future phases of the program:
• Citibank N. A. Manila
• China Bank Savings
• Wealth Development Bank Corporation
• SeaBank Philippines, Inc.