• Online publication Atlantic Council, which keeps a CBDC Tracker platform, to tag the Philippines’ CBDC status as “on a pilot.” This status is given to countries where systems are currently being tested in a real environment with a limited number of parties involved. 
• According to the ‌Atlantic Council data, 131 out of 195 countries around the world have already explored, researched, developed, piloted, or even launched their own CBDC systems as of September 2023.  This article includes a list of countries with CBDC initiatives.
• 11 countries have a fully launched CBDC, which means that the country has completed the testing and development stages of its CBDC and is now available for public use.

Recently, the Bangko Sentral ng Pilipinas (BSP) revealed that it has chosen Hyperledger Fabric as the Distributed Ledger Technology (DLT) for its wholesale Central Bank Digital Currency (CBDC) pilot, dubbed Project Agila and formerly Project CBDCPh.

Read our BSP CBDC Article Series:

On September 12, 2023, BitPinas will sit down with blockchain lawyer Rafael Padilla to discuss the impact of CBDC in the crypto landscape in the Philippines.

What is a Central Bank Digital Currency? A Refresher

CBDC is a digital currency centralized, issued, and regulated by a central bank that can serve as a medium of exchange or store of value. It is essentially the digital form of a central bank’s traditional money. And unlike cryptocurrencies, CBDC is regulated by a country’s central bank, governed in terms of supply and value by a country’s monetary policies, trade surpluses, and more.

This initiative led online publication Atlantic Council, which owns a CBDC Tracker platform, to tag the Philippines’ CBDC status as “on a pilot.” This status is given to countries where systems are currently undergoing testing in a real environment with a limited number of parties involved.

In this world where 131 countries have already launched, piloted, developed, and shown interest in having their own CBDCs, is the Philippines too slow in developing one? 

PH’s CBDC Journey: A Timeline

The idea of the Philippines having its own CBDC was first brought up in Congress, when the House of Representatives’ Committee on Banks and Financial Intermediaries formed a technical working group in December 2020 that would consolidate four bills to create one.

But in early 2022, then-BSP Governor Benjamin Diokno emphasized that the monetary agency has no plans to introduce a CBDC in the near term primarily because the population remains heavily reliant on cash given the country’s efficient and effective payment and settlement systems.

However, a month later, Diokno changed his tone, citing an analytical note released by the ASEAN+3 Macroeconomic Research Office (AMRO) that there is already plenty of interest from different countries in CBDC projects. This is when he announced that the BSP is also planning ‌to roll out a pilot CBDC implementation named Project CBDCPh.

After that, the BSP formally confirmed in April 2022 that it ‌would pursue ‌pilot project of a wholesale CBDC. This means that ‌implementation is restricted mainly to banks and other financial institutions, which is in contrast to the general purpose or retail CBDC, which is intended for use by the general public.

Then, in May, the central bank was already in talks to onboard several banks and financial institutions for the pilot testing of the CBDCPh by the last quarter of 2022.

In October, BSP again announced adopting CBDC in response to the United Nations Economic and Social Commission for Asia and the Pacific’s (UNESCAP) recommendation that nations do so as a means of accelerating economic growth.

It was seconded by then-newly appointed BSP Governor Felipe Medalla in the first month of January, explaining that the wholesale pilot run of CBDCPh in the country will still continue. 

List of Countries with CBDC Initiatives 

According to the ‌Atlantic Council data, 131 out of 195 countries around the world have already explored, researched, developed, piloted, or even launched their own CBDC systems as of September 2023. This equated to 98% of ‌global gross domestic product (GDP).

Out of this number, 11 countries have a fully launched CBDC, which means that the country has completed the testing and development stages of its CBDC and is now available for public use. These countries are The Bahamas, Jamaica, Anguilla, Saint Kitts and Nevis, Antigua and Barbuda, Montserrat, Dominica, Saint Lucia, Saint Vincent and the Grenadines, Grenada, and Nigeria. 

Meanwhile, alongside the Philippines, the other countries that have pilot CBDC systems are Australia, Brazil, Canada, China, France, Ghana, India, Jamaica, Japan, Kazakhstan, Laos, Montenegro, Russia, Singapore, South Africa, South Korea, Thailand, Tunisia, UAE, and Uruguay.

On the other hand, although launching their own CBDC systems appears to be a race, there are large countries that are still in the development and research stages, which means these countries are just in the process of designing and testing the technical feasibility of their CBDC, and no test in a real environment has been done yet. Countries like the U.S., United Kingdom, Canada, Spain, and even in the Euro Area, where the European Union established the Markets in Crypto-Assets (MiCA) regulation earlier this year, which aims to regulate the issuance and provision of crypto assets and stablecoin services in the region.

Global CBDC Landscape: Who’s Leading? 

In May 2020, only 35 countries were considering having a CBDC system. As of this writing, about 65 countries are already in an advanced phase of exploration (development, pilot, or launch).

China’s pilot of the CBDC system is said to reach 260 million people and is being tested in over 200 scenarios, including public transport, stimulus payments, and e-commerce.

Meanwhile, according to Atlantic Council, 19 of the G20 countries are now in the advanced stage of CBDC development. Of those, nine countries are already in the pilot implementation stage:

“Nearly every G20 country has made significant progress and invested new resources in these projects over the past six months.”

Atlantic Council

Lastly, the U.S., which undoubtedly has the most active regulators when it comes to crypto, is said to slow down its progress on retail CBDC and move forward on a wholesale (bank-to-bank) CBDC.

This article is published on BitPinas: Global Perspectives: The List of Countries With CBDC Initiatives

Disclaimer:

• Before investing in any cryptocurrency, it is essential that you carry out your own due diligence and seek appropriate professional advice about your specific position before making any financial decisions.
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