The Bangko Sentral ng Pilipinas (BSP) is set to introduce its wholesale central bank digital currency (CBDC) by 2029, aligning with the six-year term of BSP Governor Eli Remolona Jr.

During a recent press briefing, BSP Deputy Governor Mamerto Tangonan revealed that Project Agila, the central bank’s initiative to develop a wholesale CBDC, is approaching the conclusion of its proof-of-concept phase.

Tangonan emphasized the project’s progress, noting that no other central bank, except the Swiss National Bank, has successfully launched a wholesale CBDC.

“The governor is very early in his term and we’re already about to conclude proof of concept. This is an innovative payment instrument,” he stated.

Launched in December 2022, Project Agila consists of two phases aimed at exploring CBDC technology and evaluating its potential to advance the large-value payment system.

The BSP completed the first phase of the pilot in July 2023, selecting Hyperledger Fabric as the distributed ledger technology.

BSP Payments Policy and Development Department Director Bridget Rose Mesina-Romero announced that a comprehensive report detailing findings from the sandbox test experiments will be released by the end of the year.

She added that recent sandbox tests from May to June have successfully completed the initial step, which included testing the distributed ledger technology and tokenization of the wholesale CBDC.

The BSP will also examine the programmability feature of CBDCs, which could enhance and automate payment system processes, potentially streamlining operations and reducing the number of intermediary institutions.

Tangonan highlighted the importance of ensuring both the BSP and banks are well-versed in CBDC utilization, management, and security.

“If the proof-of-concept phase increases our and the banks’ literacy and readiness for launch, then we will decide on proceeding based on that,” he said.

“This is an entirely new thing, and we need to ensure we can offer, maintain, and operate it safely, with a viable business use case.”

Wholesale CBDCs are digital currencies issued by central banks to commercial banks and financial institutions for settling interbank payments, securities transactions, and cross-border payments.