The Aboitiz-led Union Bank of the Philippines marked another first in digital banking as it launched its own cryptocurrency called PHX.
PHX is a stablecoin - a type of digital money that mimics traditional, stable currencies and is resistant to market volatility - that will be used on UnionBank’s i2i network to make it easier for rural banks to access remittance and payments. PHX is pegged to the Philippine peso.
“This pilot was approved and sanctioned by the Bangko Sentral ng Pilipinas,” the bank said in a disclosure to the Philippine Stock Exchange on July 26, 2019.
Newspaper reports, citing a company statement, said successful live transactions were conducted on July 24 by three rural banks participating in the i2i network, namely Summit Rural Bank, Progressive Bank and Cantilan Bank.
“Each of three rural banks performed buy, transfer and redemption transactions for PHX. The three banks were also able to conduct domestic remittances to one another using PHX,” UnionBank said.
Rural banks on the i2i network may buy the stablecoin by directly debiting from their UnionBank accounts and redeem this for peso which will be credited to their UnionBank account.
The i2i retail payment system is UnionBank’s blockchain initiative that aims to bring the unbanked Filipinos into the financial system. It stands for island-to-island, institution-to-institution, and individual-to-individual.
It was launched in 2018, runs on ConsenSys’ Kaleido platform, and is handled by UBX Philippines Corporation, UnionBank’s financial technology arm.
Project i2i aims to cater to cooperatives, sari-sari stores and other sectors soon.
UnionBank has been leading the foray into digital banking in the country.
In November 2018, UnionBank launched the first blockchain-based platform for General Circulars (GCs), which provides a cost-effective way of allowing employees to check these latest internal documents.
The bank also uses blockchain technology to power its credit cards rewards program and enable real-time redemption through mobile and online banking platforms.
UnionBank has also launched the first virtual currency automated teller machine (ATM) in the country which allows customers to buy and sell digital units for cash.
This virtual ATM is situated at The Ark branch in Makati City, the first fully digital bank branch in the country.
All transactions at The Ark are carried out through self-service machines or tablets that provide customer service as well as cash deposit and cash withdrawal services. There are no bank tellers nor documents to be filled out.
UBX is also building the country's first blockchain-enabled lending platform for micro, small and medium enterprises (MSMEs) in partnership with OneConnect Financial Technology Co. Ltd., an associate company of China's insurance giant Ping An Group. (Ventures Cebu)