MANILA - The Bangko Sentral ng Pilipinas on Wednesday said it would "pursue" a pilot project on the use of central bank digital currency (CBDC) for wholesale transactions.

The project called the CDBCPh is seen to promote stability of the country's payment system, the central bank said in a statement.

During the test run, CBDCs will be used for large-value financial transactions on a 24/7 basis across a limited number of financial institutions, the BSP said.

The pilot covers policy and regulatory considerations, technological infrastructure, governance and organizational requirements, legal matters, payment and settlement models, reconciliation procedures and risk managers, it said.

Project CBDCPh is a "major step" for the entire financial industry, BSP Governor Benjamin E. Diokno said during the 14th Annual Group of 24/Alliance for Financial Inclusion Policymakers’ Roundtable discussion at the IMF-World Bank Spring Meetings.

“Learnings from the pilot will be critical in constructing the BSP’s medium- to long-term roadmap for more advanced wholesale CBDC projects that shall further strengthen the Philippine payment system,” Diokno said.

"The BSP is exploring the potential use of wholesale CBDCs in areas where these can yield the greatest value-adding benefits to the payment system," the central bank said.

The BSP however, clarified that the project is restricted mainly to wholesale transactions among banks and other financial institutions.

Diokno said it could ease challenges in cross-border foreign currency transfers, settlement risk exposure from using commercial bank money in equities and operating an intraday liquidity facility.

Other central banks globally, including China and South Korea, have also been testing the use of CBDCs.

• BSP eyeing central bank digital currency use in 'near future', Diokno says
• Bangko Sentral 'studying' central bank-issued digital currency, says Deputy Gov

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