Philippine Central Bank Creates Blockchain, FinTech Unit

The Philippine central bank has created a new unit to monitor blockchain and fintech firms.

Bangko Sentral ng Pilipinas (BSP), The Philippine’s central bank, announced the creation of a blockchain and fintech (financial technology) unit as part of its National Retail Payment System (NRPS).

BSP Governor Nestor Espenilla Jr. made the announcement during a conference last Friday. The central bank chief appointed Vicente de Villa III as officer-in-charge of Financial Technology Sub-Sector (FTSS) under the Financial Supervision Sector to oversee blockchain and fintech companies as part of the BSP’s initiative to increase digital payments across the country.

“An efficient retail payment system has the potential to transform the economy through the efficiency it brings to business transactions and the savings generated from a shift from paper-based to digital instruments,” Espenilla said.

The conference was organized by the BSP Payments and Settlements Office to increase awareness of the need to establish appropriate and innovative systems to process financial transactions in the most efficient way possible while ensuring their safety and integrity.

De Villa III said the unit was created a month ago and will handle two offices, with a Payments and Settlements Oversight Department and a Core Information Technology Specialist Group.

"We are still overseeing banks, but banks and technology nowadays have to come hand-in-hand… There's outsourcing that takes place and we have to make sure that these outsourcing services are governed by our rules and regulations," De Villa said.

A cybersecurity unit was also created alongside FTSS to check financial firms’ compliance and to protect companies against cybersecurity breaches.

Espenilla explained the NRPS was created to create a safe, efficient and reliable electronic retail payment system that is interconnected and interoperable.

He explained that NRPS’ ultimate goal is to boost the retail electronic payment transactions to 20 percent by 2020 and improve our economic competitiveness.

To bring the realization of the goal, two Automated Clearing Houses (ACH) - PESONet and INSTAPAY - were launched last Nov 8, 2017, and April 23, 2018, respectively.

Both ACHs seeks to solve the government, businesses and ordinary consumers’ current payment problems.