The Bangko Sentral ng Pilipinas (BSP) has successfully concluded testing for Project Agila, a pioneering initiative aimed at enabling financial institutions (FIs) to conduct fund transfers seamlessly, even outside traditional business hours. This includes evenings, weekends, and holidays. The innovative project leverages open-source distributed ledger technology (DLT) through Oracle Cloud Infrastructure, setting the stage for more resilient and efficient interbank operations.
Project Agila represents a proof-of-concept for the BSP’s exploration of a Central Bank Digital Currency (CBDC) at the wholesale level. The comprehensive evaluation process included functional, performance, security, exploratory, end-to-end, and programmability testing, ensuring that the system is robust and secure for real-world application.
Enhancing Financial Systems with Wholesale CBDCs
“Wholesale CBDCs are expected to enhance liquidity management, reduce settlement risks, and support financial stability,” BSP Governor Eli M. Remolona, Jr. stated, highlighting the potential benefits of this emerging technology. He further explained that insights gained from Project Agila would serve as a cornerstone for the BSP’s CBDC roadmap, aimed at leveraging cutting-edge technologies to boost the efficiency and resilience of the national payment system.
CBDCs are a form of digital money, denominated in the national currency and directly backed by the central bank. Unlike retail CBDCs, which are intended for public use, wholesale CBDCs cater to commercial banks and other financial institutions. They can be employed for critical financial activities, including interbank payments, securities transactions, and cross-border payments.
Testing the Future of Large-Value Payments
Through Project Agila, the BSP, in collaboration with participating FIs, has explored the potential of CBDCs to transform the country’s large-value payment system. The initiative also provided a platform to evaluate whether this technology could improve operational efficiency, reduce risks, and enhance financial stability in the Philippine economy.
The successful completion of Project Agila underscores the BSP’s commitment to staying at the forefront of financial innovation. It also aligns with the central bank’s broader goal of fostering a modernised, secure, and inclusive financial system for the Philippines.
As the BSP moves forward with its CBDC strategy, Project Agila’s findings will play a critical role in shaping the future of digital currency in the Philippines, ensuring the country remains agile and prepared for the next wave of financial technology advancements.
