Diokno says BSP digital currency unlikely until 2023

The Bangko Sentral ng Pilipinas (BSP) is unlikely to issue its own digital currency under the term of Governor Benjamin Diokno which lasts until 2023, as it said more research is needed moving forward.

At a virtual briefing on Thursday, Diokno said the BSP completed its study on a possible central bank digital currency (CBDC), which found that more research is needed.

"The end of my term is 2023, I don't think so," he told reporters when asked if a CBDC or some form of readiness to issue would be possible under his term.

The BSP in July said it is exploring the creation of its own CBDC, with the formation of a technical working group (TWG) to study the feasibility and policy implications of such an issuance.

Diokno on Thursday said the study has already been completed, but recommended continuing research, capacity-building, and the establishment of networks with central banks and institutions that are also researching on CBDC.

The study is exploratory in nature, in line with the central bank's Digital Payments Transformation Roadmap which aims to convert at least 50% of retail payments into digital form by 2023, with at least 70% of adult Filipinos banked by then.

"The initiative is aimed at enabling the BSP to keep pace with, and to enhance its readiness to adjust and evolve amid rapid technological developments," said Diokno.

According to the BSP study, benefits of a CBDC issuance include facilitating financial inclusion, addressing the decline in the use of physical cash, widening the range of options for monetary policy, and encouraging competition and innovation in the payments system.

Meanwhile, risks include possible financial disintermediation, risks to consumer welfare and loss of privacy, increased costs for the banking system due to possible competition between CBDCs and bank deposits, the incidence of money laundering and financing terrorism, and cybersecurity issues. -MDM, GMA News