In a move that will see the emergence of digital banks across the country, the Philippines Central Bank is planning to lay down a framework that will support digital banking.
According to the words of the Deputy Governor of Bangko Central ng Pilipinas, Chichi Fonacier, the bank is set to release a memo where the digital banks framework would be listed out at the end of this month.
This move is coming after the announcement of the law that supports virtual banking which should be hopefully passed into domestic law by the end of the year. The bill has also required that around $411 million will be raised as capitalization in the coming years.
The new framework would signal the emergence of digital banks across the Philippines
If the Act is eventually passed, then it means that the country will be able to certify and approve just five digital banks in five years. Also, foreign-owned entities will increase across the country with the estimated percentage said to be around 40%-70%.
Giving his review on the framework, Albay’s second district representative, Joey Salceda, said the move was a good development that aims to support the activities of the digital banks in the country and across the world. Furthermore, the representative also said they were interested in the full participation of foreign firms as they hope to gain technological knowledge from elsewhere.
China still ahead of major nations in CBDC creation
With innovation seeing a new direction, countries like the USA and China are leading the race in the invention of Central bank digital currency. While the Philippines is still looking to lay a framework for digital banks, China has gone ahead to test the usage of digital currency across selected provinces and areas.
Reportedly, the Bank of International Settlements said the search for CBDC in 2020 was greater than the search for Bitcoin and other digital assets with Libra coming in third place. Presently, China has said it intends to use its CBDC for small retail transactions.