The Digital Dollar Project (DDP) recently announced the completion of a pilot study. This study focused on remittance payments to the Philippines using a simulated retail central bank digital currency (rCBDC). Partners in this project included Western Union and BDO Unibank.
The project utilized the DDP's Champion Model, where a simulated central bank issued CBDCs to an intermediary bank. This allowed Western Union (WU) to access the CBDCs for remittance to a BDO Unibank customer in the Philippines. To facilitate the currency exchange, WU employed a decentralized exchange (DEX) and traded a dollar CBDC for a Philippine peso CBDC at a real-time rate set by a third-party oracle. Once the payment was confirmed, WU transferred the amount to the bank customer's account.
This pilot study showcases the potential of digital currencies in improving the efficiency and convenience of remittance payments.
