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Philippine Central Bank Warms Up to Digital Money to Aid Fintech

·1-min read
FILE PHOTO: Philippine central bank governor Benjamin Diokno. (AP Photo/Aaron Favila)
FILE PHOTO: Philippine central bank governor Benjamin Diokno. (AP Photo/Aaron Favila)

By Siegfrid Alegado

Philippine central bank Governor Benjamin Diokno said the technology behind digital tokens could improve delivery of financial services, as the regulator proceeds to study the feasibility of its own digital currency.

Digital tokens expand reach and lessen costs of financial services, Diokno said in an emailed reply to Bloomberg late Thursday. It could also help the central bank eventually reduce the use of fiat money, he said.

The Philippines’ study of a central bank-backed digital currency includes “a comprehensive discussion” on issues such as price stability and legal hurdles, Diokno said, as monetary authorities in the EU and China consider their own digital currencies. The central bank will also assess the impact on the existing domestic digital-token market and the broader financial system, he said.

The Philippines adopted an open and flexible regulation of digital tokens early, paving the way for relatively wider use and trading of cryptocurrencies such as Bitcoin and Ethereum. There are 16 licensed digital currency exchanges operating in the country, according to the central bank.

Bank of Thailand is testing its digital currency system with local companies and wants the big ones to eventually adopt the technology, Governor Veerathai Santiprabhob said at a fintech fair in Bangkok on Friday. The Thai authority has tested the system with local lenders and has made some cross-border transfers with the Hong Kong Monetary Authority, Veerathai said.

While there’s no formal agreement with other authorities to collaborate on central bank-backed digital currencies, Diokno said “this will be a continuing process of knowledge-sharing and close communication.”

© 2020 Bloomberg L.P.