- The Bangko Sentral ng Pilipinas (BSP) employs Hyperledger Fabric for its inaugural wholesale CBDC initiative, Project Agila.
- Hyperledger Iroha, pivotal in Cambodia’s Project Bakong, was a potential contender for this project.
In a pivotal move for the digital currency landscape, the Philippines’ central bank is aligning with the Hyperledger Fabric blockchain for its maiden trials of a wholesale CBDC named Project Agila. Influential insights from the International Monetary Fund (IMF), the BIS Innovation Hub, and other significant financial institutions played a key role in this decision.
“This strategic collaboration underscores our commitment to foster financial innovation in the country,” mentioned a spokesperson from the BSP. Today, the Bangko Sentral ng Pilipinas (BSP) declared this collaboration.
DLT, or blockchain, is a prevalent choice for wholesale CBDCs, primarily since banks are already integrated with central bank accounts. This technology offers enhanced programmability features. More crucially, it paves the way for the CBDC to function as an on-chain settlement asset, vital for other blockchain resources like tokenized securities. Additionally, the BSP emphasized the uninterrupted availability of DLT, which facilitates interbank transactions beyond regular business hours, an upgrade from conventional payment systems.
A BSP official stated, “Adopting DLT is not just about embracing new technology; it’s about enhancing the efficiency and inclusivity of our financial systems.”
To ensure optimal technology adoption, a stringent scoring system was in place. Parameters for this system included aspects like access, security, 24/7 availability, interoperability, and the crucial component of programmability.
As per BSP Governor Eli Remolona Jr.,
“By the culmination of Project Agila, we anticipate that the pilot participants will possess a more profound comprehension of CBDC technology. They will evaluate the potential of wholesale CBDCs to instigate significant advancements in the domain of large-value payment systems. The outcomes from this assessment will strategically guide both the BSP and the industry in potentially unveiling wholesale CBDCs within the Philippines.”
Potential Contenders and Future Possibilities
Hyperledger Iroha was among the other plausible candidates. Notably, this technology is the bedrock for Cambodia’s Project Bakong, and its primary developer, Soramitsu, had collaborated with the BSP in the past. The Philippines, however, has communicated its disinclination towards launching a retail CBDC since the nation already has a robust digital consumer payments framework, and essential financial inclusion reforms are already in place.
There’s burgeoning interest in employing CBDCs for cross-border payments. The Philippines showcased its enthusiasm in participating in Project Dunbar, a multi-CBDC venture based in Singapore. Though it seems that this experimental initiative has reached its conclusion, other significant endeavors like the MBridge Project are gaining momentum, roping in major players like the central banks of Thailand, Hong Kong, China, and the UAE, with many countries keenly observing.
In the context of Project Agila in the Philippines, notable local banking entities participating include BDO Unibank, China Banking Corp., Land Bank of the Philippines, and several others. Observing institutions for potential subsequent phases feature names like Citibank N. A. Manila and China Bank Savings.