The Central Bank of the Philippines plans to lay down a framework that would support digital banking in a move that will show the emergence of digital banks across the country.
According to Chichi Fonacier, the Deputy Governor of Bangko Sentral ng Pilipinas, the bank releases a memo where the digital bank framework can be published by the end of the month.
This plan comes after the law’s announcement that it supports virtual banking that should hopefully be passed to domestic law by the end of the year. This bill also required around $411 million will be raised as capitalization in the next years.
The new framework shows the rise of digital banks across the Philippines
If the Act is successfully approved, it means that the country will verify and authorize only five digital banks in the next five years. Furthermore, foreign-owned individuals would increase across the country with the estimated percentage that is said to be around 40%-70%
Joey Salceda, Albay’s second district representative, has been reviewing the framework. He stated that the move was a good development, and it aims to support the digital banks’ activities in the country and across the world. Moreover, the representative added that they were interested in foreign firms’ full contribution as they are hoping to gain technological knowledge somewhere.
China leads the significant nations in CBDC creation
Seeing a new direction, this innovation leads countries like the USA and China as they top the race in the invention of Central Bank Digital Currency. Though the Philippines is still planning a framework for digital banks, China has gone ahead to test digital currency usage across designated provinces and areas.
According to the reports, the Bank of International Settlements has said that the search for CBDC in 2020 was immense from searching for Bitcoin and other digital assets with Libra placing in third place. Recently, China has said that it intends to use its CBDC for small retail transactions.