More financial institutions are warming up to blockchain technology and cryptocurrencies even with the largely unregulated nature of the digital currency space. In another similar development, the UnionBank of Philippines may be looking to integrate Bitcoin mining into its operations, as the financial institution recently displayed its cryptocurrency miners at a business summit in the nation.
The Philippino Bitcoin Craze
Bitcoin has been a legal tender in the Philippines since 2017 when the government officially regulated crypto exchanges as remittance firms, giving financial institutions the go-ahead to use cryptos in facilitating remittances.
“The Bangko Sentral does not intend to endorse any [virtual currency], such as Bitcoin, as a currency since it is neither issued or guaranteed by a central bank nor backed by any commodity. Rather, the Bangko Sentral aims to regulate [virtual currencies] when used for delivery of financial service, particularly, for payments and remittances, which have a material impact on anti-money laundering, combating the financing of terrorism, consumer protection and financial stability,” the Central Bank circular read back in February 2017.
The amenable regulation regarding the local crypto industry has prompted the proliferation of remittance companies that utilize blockchain-based digital currencies in their operations.
According to reports, a top official of the UnionBank of Philippines was seen operating Bitcoin miners at a corporate event on May 18, 2018. Although the bank has not officially commented on the matter, the possibility of the financial institution starting its large-scale bitcoin mining cannot be ruled out at this time.
— Miguel Cuneta (@MiguelCuneta) May 18, 2018
The UnionBank has been experimenting with blockchain technology for quite some time now. Earlier in 2018, the innovative financial institution developed its flagship digital bank called “The Ark.” The initiative eliminates the use of paper tellers in banking as customers are handed iPads to carry out their regular banking operations such as deposits and cash withdrawals.
Ark also integrated virtual reality into its system. The platform uses VR to allow customers to “experience” a car or choice property they like before granting them loans to purchase them. “The blockchain technology is one of those technologies that are predicted to really alter the face of banking,” said Unionbank president and CEO Edwin Bautista.
Fast forward to May 21, 2018, and UnionBank has announced it’s taking its blockchain solution a notch further by linking rural banks in the same way Bancnet and SWIFT have connected larger financial institutions.
The bank has hinted that at least six rural banks will be used in the pilot and others will be added as time goes on. The project which has gained the approval of the central bank is aimed at facilitating quicker banking transactions. “With blockchain [technology], the steps involved in transactions will be drastically cut down from 20 to just three. Blockchain will undoubtedly crack the code of financial inclusivity,” said the UnionBank chair, Justo Ortiz during the launch of the Blockchain Association of the Philippines.
Ortiz also noted that the initiative is primarily focused on the unbanked members of the society who mostly live in rural communities.
More Blockchain Hands on Deck
The chairman made it clear that the bank will increase its blockchain programmer workforce from 30 to 100 by the end of 2018, and to a whopping 20,000 in a few years time.
“We need to be able to bring people from abroad to basically up the game here at the enterprise level. At the end of the day, if the enterprises adopt, it will force the individuals to adopt. It’s chicken and egg.”