by Melissa Luz T. Lopez
THE BANGKO SENTRAL ng Pilipinas (BSP) is examining the possibility of issuing digital currencies in a time of increasing use, although industry experts have warned that doing so may disrupt monetary policy operations.
BSP Governor Nestor A. Espenilla, Jr. has mentioned in a recent speech that monetary authorities have studied the emergence of issues of central currencies digital currencies (CBDC) in other countries and its potential impact on the local financial system.However, they are still not thrilled to pursue this road to the Philippines.
Especially, Espenilla he said that they are controlling the CBDCs in terms of "what it means for the provision of credit and the impact on the financial system", underlining that they are giving "careful consideration" on the quest ion.
Also called fiat digital money, the CBDC would face issues of legitimacy as these would be guaranteed by the central bank and is recognized as real money, even if used online.
Countries such as Ecuador, Senegal, Venezuela and the Marshall Islands have moved to the issue of cryptocurrencies as a legal form of payment.
Two industries The experts reiterated the need for a comprehensive study of the use of virtual currencies as legal tender in the Philippines, in the context of liquidity management and interest rates.
Cecilia Mueller-Chen, head of the Crypto Valley Association based in Switzerland, said the monetary authorities need to define clear rules for the use of blockchain technology and digital currencies as a first step.
"I think several central banks have different speeds or speeds in which they have assessed whether they can issue some kind of e-currency that will integrate any kind of legally binding offer," Ms. Mueller-Chen said in a & # 39; interview during his recent visit to Manila.
"In reality it is rather a complex problem because there are problems on how to conduct monetary policy … When issuing electronic money that could be exchanged or used in a sort of payment system, it is necessary to trace it too. 39; it, "he explained.
"The question is: do you support the supply of money M1 in terms of money? How do you control the interest rates on an electronic money, you will tie it to real money? How do you verify it?"
Justo A. Ortiz, president of the Blockchain Association of the Philippines, noted that the Philippines could benefit from a wider use of cryptocurrencies, but reported their potential impact on market returns.
"It is definitely feasible, but our central bank must believe … Our economic situation could be different – these … decisions require a lot of research because it must be a sort of positive or additive to their mandate (BSP)" Mr. Ortiz said.  "The Bank of Canada thought it would improve (the conduct of monetary policy) because it would reduce cash, our central bank also has that objective that they want to digitize, move transactions electronically," he added.
"Like everything … it must be examined very carefully and must be carefully studied to support it."
The BSP has moved to regulate the exchange of virtual currencies or the companies that convert the weight values into currency before being traded online via a blockchain platform.
At the same time, the Securities and Exchange Commission published a draft guideline for the first coin offerings, which will cover businesses that issue tokens or digital currencies to raise capital.
Industry players have called for "legal and regulatory clarity" to allow companies and blockchain transactions to thrive, at a time when the BSP is promoting the shift to digital payments.