Philippines Explores Wholesale CBDC for Tokenized Government Bond Settlement

The Bangko Sentral ng Pilipinas (BSP) is exploring the issuance of a wholesale central bank digital currency (wCBDC) to support the settlement of tokenized government bonds. This follows earlier initiatives by the Bureau of the Treasury, which launched tokenized treasury bonds for institutional investors in 2023 and subsequently extended issuance to retail participants in 2024. In parallel, the central bank conducted initial wholesale CBDC trials under Project Agila to assess the use of digital central bank money for interbank settlement, including transactions outside traditional operating hours.

The proposed next phase focuses on integrating a wholesale CBDC as a settlement layer for tokenized sovereign debt. According to statements by Deputy Governor Mamerto Tangonan, the tokenized bond framework currently lacks an efficient settlement instrument, which the central bank intends to address through the introduction of a CBDC-based solution. This approach would enable delivery-versus-payment mechanisms and enhance the efficiency and security of government securities markets operating on distributed ledger infrastructure.

Building on the initial Project Agila pilot, which involved six banks, the central bank is expected to expand participation in subsequent phases, although no formal timeline has been announced. The wholesale CBDC is being considered for a range of use cases, including interbank payments, securities settlement, and cross-border transactions. In this context, the Philippines’ engagement with international initiatives such as mBridge underscores the broader relevance of interoperable digital currency frameworks in facilitating cross-border financial flows and modernizing payment infrastructure.