Philippines Plans to create new Digital Currency as Safe Crypto Alternative

The Philippines' central bank, Bangko Sentral ng Pilipinas (BSP), is gearing up to introduce a Central Bank Digital Currency (CBDC) within two years, positioning it as a stable and regulated counterpart to the unpredictable cryptocurrency market. Unlike typical digital currencies, the Philippine CBDC will not rely on blockchain technology but will instead utilize the Peso Real Time Gross Settlement System, under the National Payment Systems Act.

BSP Governor Eli Remolona Jr. emphasized that the CBDC aims to provide a safer digital currency option, inspired by China's e-CNY success. It's designed to work alongside physical money, offering a more secure choice compared to the volatile crypto sector. The initial distribution of this digital currency will target commercial banks, enhancing payment systems' efficiency and security. Remolona noted that other central banks' blockchain experiments had shortcomings, justifying the BSP's alternative approach. The CBDC's goal is to complement cash, echoing Sweden's central bank's stance, which emphasizes digital currency as an addition to, not a replacement for, cash.

Globally, regulations are tightening around cryptocurrencies, with India imposing a 30% tax on crypto transactions and introducing a closely monitored CBDC. This reflects a broader trend towards establishing controlled digital currencies to mitigate the risks associated with private cryptocurrencies. In summary, the Philippines is advancing with a blockchain-free CBDC to offer a secure, efficient digital payment system. This move aligns with a global shift towards regulated digital currencies, highlighting the BSP's commitment to financial stability and innovation.