Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Cryptocurrency»How digital money might work in the country
    Cryptocurrency

    How digital money might work in the country

    August 13, 20244 Mins Read


    he Bangko Sentral ng Pilipinas (BSP) will complete its Philippine Central Bank Digital Currency (CBDC) pilot by the end of the year, according to financial news outlet Central Banking.

    On March 6, BSP Deputy Governor Mamerto Tangonan said the pilot CBDC, “Project Agila,” would be a learning exercise as the country adopts digital money.

    But how does the Philippine CBDC work and could impact the public?

    What is a CBDC?

    This represents the PH CBDC.
    Free stock photo from Unsplash

    Management consultation firm McKinsey & Company defines CBDC as the digital form of a national currency.

    CBDCs take advantage of the decentralized computer networking technology behind Bitcoin, the first cryptocurrency. As a result, they work like crypto but rely on a central hub, namely a central bank.

    READ: More emerging market central banks push digital money

    Ironically, the enigmatic Satoshi Nakamoto created Bitcoin to replace the traditional financial system. 

    Central banks issue CBDCs to support a country’s financial services, set monetary policy, and issue currency. 

    At the time of writing, only a few countries, such as the United States, China, Japan, and Germany, have been testing digital money. 

    Each nation is testing a different system for its digital currency. For example, China is testing e-CNY, which relies on private banks to distribute and maintain digital currency accounts for their customers. 

    What is the Philippine CBDC?

    These are Philippine peso bills.
    Free stock photo from Unsplash

    The BSP said Project Agila aims to enhance the Philippines’ large-value payment system. Specifically, it will enable “inter-institutional fund transfers even during off business hours.”

    These periods include evenings, weekends, holidays, or times when the Philippine Payment and Settlement System (PhilPaSS) is unavailable. 

    The BSP chose Hyperledger Fabric as the distributed ledger technology (DLT) that will facilitate Project Agila. 

    Hyperledger Fabric specializes in hosting smart contracts, digital agreements that execute immediately after participating parties meet their conditions.

    In contrast, digital transactions need verification from both the sender and receiver before they function. The BSP said it chose Hyperledger to record, share, and transfer data and transactions across different participants. 

    Learn more about Hyperledger Fabric and other smart contract blockchains in this Inquirer USA article.

    The BSP said it will issue wholesale CBDCs to commercial banks and other financial institutions. Then, they will use Philippine CBDCs to “settle interbank payments, securities transactions, and cross-border payments.” 

    The Hong Kong Trade Development Council (HKTDC) reported the BSP considered creating a retail CBDC, which is digital money for Filipino citizens.

    “Although a retail CBDC does offer a safe alternative to traditional bank deposits and boosts electronic payment systems, it may pose threats such as regulatory disintermediation, increasing the BSP’s regulatory footprint, and worsening bank runs,” HKTDC reported. 

    The BSP will not use blockchain technology for the wholesale CBDC. Instead, it will run the digital money on PhilPaSS.

    What are the pros of CBDCs?

    This represents the digital currency
    Free stock photo from Unsplash

    You might be wondering why central banks are transitioning to digital money. One of the biggest reasons is the plummeting cash usage worldwide. 

    Wulf Kaal, a professor specializing in digital currencies at the University of St. Thomas, said that only 8% of the world’s circulating currency is paper.

    READ: What is Cash app?

    The rest is digital as many have become accustomed to digital payments. Aside from catching up to global transformation, CBDCs have other potential benefits: 

    • McKinsey says central banks can reduce costs with digital finance by shifting spending away from physical infrastructure. 
    • The Philippine CBDC and similar currencies aim to boost the speed and efficiency of electronic payment systems. 
    • This digital currency may also help more people have bank accounts as everyone has mobile devices nowadays. 
    • Blockchains use cryptography technology to “sign” transactions digitally, securing and executing transactions quickly. 

    What are the cons of CBDCs?

    This represents one of the problems with CBDCs.This represents one of the problems with CBDCs.
    Free stock photo from Unsplash

    Some fear central bank digital currencies because they believe it lets the government control their hard-earned money. This concern also convinces many to hold digital assets like Bitcoin. However, CBDCs have other flaws, such as:



    Your subscription could not be saved. Please try again.


    Your subscription has been successful.

    Forbes says there are too many pilot programs testing different methods for CBDCs. It will take time to determine which one is the most ideal.

    • Forbes says there are too many pilot programs testing different methods for CBDCs. It will take time to determine which one is the most ideal.
    • Using CBDCs can be more complicated than physical money. For example, people must learn how to create, secure, and use digital wallets for their CBDCs.
    • CBDCs may save on physical infrastructure, but it could require more funding for processing power. Simply put, central bank digital currencies require powerful computers to operate.





    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    FinMin raises alarm over unregulated digital deals

    Cryptocurrency

    MEDIROM launches cryptocurrency strategy with next-generation proof of human technology, World

    Cryptocurrency

    Ethereum Shatters Records, Surges 250% From April Lows, Why Is Cryptocurrency Rising? | Cryptocurrency News

    Cryptocurrency

    How the digital euro could change the way people pay

    Cryptocurrency

    AshToken: Empowering Nigerian businesses with cryptocurrency solutions

    Cryptocurrency

    Top Blockchain Applications and Use Cases

    Cryptocurrency
    Leave A Reply Cancel Reply

    Top Picks
    Property

    Anywhere Real Estate Inc. nomme Tom Hudson à la tête des relations investisseurs

    Commodities

    Commodities Prices in India: Today’s Rates

    Property

    Credas launches digital wallet, payments as property sector adapts to UK changes

    Editors Picks

    Big Beautiful Bill pulls plug on solar energy grants for lower-income Akron residents

    August 18, 2025

    Domestic “Red Metal” Critical to America’s Clean Energy Future

    July 14, 2024

    Twisted cryptocurrency launches in tribute of suspected DC Capital Jewish Museum terrorist Elias Rodriguez

    May 24, 2025

    MAC Copper Limited : BMO Capital de acheteur à neutre sur le titre

    June 3, 2025
    What's Hot

    South Korea’s mint halts gold bar sales as supply tightens

    February 12, 2025

    Offshore investments: Is your structure optimised or overlooked?

    April 3, 2025

    What crazy rich Asians are looking for in luxury property today

    August 7, 2024
    Our Picks

    Utility company nixes proposal to add transmission system through Meeks Mountain area

    October 26, 2024

    SA’s agricultural exports reach US$3,36 billion 

    July 8, 2025

    Three Speakers Join FinTech LIVE London Global Summit

    October 16, 2024
    Weekly Top

    Criminals funnelling dirty money into UK pushing up London property prices

    August 23, 2025

    HTX Proudly Announces Justin Sun Named Innovator of the Year at Asia FinTech Awards 2025

    August 23, 2025

    7 Retirement planning sins you need to unlearn right now – Money Insights News

    August 23, 2025
    Editor's Pick

    Métal Hurlant (court métrage) – Court Métrage

    June 4, 2025

    Exploring Online Casinos That Accept CoinsPaid for Blockchain Transactions

    August 14, 2024

    Cultivating History: Women’s Perspectives on Agriculture at Austin Museum – DiscoverWestman.com

    August 23, 2024
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.