By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) has the support of the Securities and Exchange Commission (SEC) to further explore the issuance of its own cryptocurrency which can be called “e-peso” or “e-piso”.
BSP Governor Nestor A. Espenilla Jr. said they are studying other countries’ central bank issued digital currencies (CBDCs) as the Philippines transition from a cash-heavy payments system to cash-lite.
“Basically what we’re looking at is similar to bitcoins but issued by the central bank,” said Espenilla.
SEC Commissioner Ephyro Luis B. Amatong said they are in “very close discussions” with the BSP, along with other agencies in the BSP-led Financial Stability Coordination Council, in a future CBDCs.
Amatong said the FSCC has no problem with the BSP plan, in fact they are encouraging the creation of its own virtual currency or cryptocurrency that would be similar to electronic money or e-money. An example is Switzerland’s own proposed “e-franc”.
“We encouraged BSP (and) it’s just a format. Much of money is already digital (and there’s already) clearing and settlement of the large banking transactions. It occurs only on the databases of the BSP,” said Amatong. He added that an e-money type of CBDCs will be safer in the long run.
Espenilla is particularly keen on using digital currency for retail payments. He said since this is backed by the state, and therefore legal tender, it could be used not just for bank-to-bank but for retail transactions. “There are a lot of options and there are central banks getting into it. We want to see how this (CBDCs) will work out for them.”
The BSP has been pushing hard on the retail side of electronic payment systems and according to Amatong, the transition should be seamless for the most part. For one, most Filipinos have smartphones but a large number still have no bank accounts. But, if one has an e-peso/e-piso and a smartphone, then that is your bank, he said. “You can now transact digitally,” he added.
It was in July this year, in a gathering of remittance-correspondent banks, that Espenilla first revealed the BSP’s exploratory talks for a CBDC for retail payments, among other things. They are studying how a BSP e-money can impact credit and the overall financial system.
Espenilla said some banks are preparing virtual currencies of their own and this calls for the BSP’s assessment of CBDCs. Presently, the BSP is collaborating with other central banks “for a harmonized regulatory approach” on virtual currency and initial coin offerings.