UNIONBANK of the Philippines, Inc. launched its own stablecoin to provide rural banks under its blockchain-powered platform easier access to remittance and payments.
In a statement on Thursday, the Aboitiz-led bank said it is issuing PHX, a stablecoin to be used on its i2i network of rural lenders and UnionBank.
UnionBank President and Chief Executive Officer Edwin R. Bautista said PHX is a “tokenized” fiat directly pegged to the Philippine peso and is backed by the blockchain technology.
“(Stablecoins) utilize the technology behind cryptocurrency. Behavior of these mirrors that of fiat because it is always worth the value of the underlying fiat currency, hence, no volatility,” Mr. Bautista said in an e-mailed response.
Successful live transactions were conducted on Wednesday, executed 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.
“(PHX) enables transparent and automatic execution of payments,” said Ramon Vicente V. De Vera II, UnionBank senior vice president and head of its fintech business group. “Reconciliation challenges of the past are no longer an issue. Meanwhile, audit and compliance are made easier.”
i2i is a blockchain-based platform that connects rural banks to each other and to UnionBank, providing small lenders access to services which can be coursed through the system. Launched in 2018, i2i is now handled by UBX, UnionBank’s financial technology arm.
Blockchain is a distributed data ledger which involves a large network of entities where data is stored in “blocks.” The storage units are continuously updated and being secured using cryptography, making data management and data-driven processes decentralized, tamper-proof and more transparent.
PHX will be made available to rural banks under the i2i platform. These lenders can buy or sell stablecoins though their UnionBank accounts.
Given its interoperability, PHX can soon be used across various platforms and electronic wallets.
“This has the potential to make transactions, payments and other use cases more accessible, efficient and inclusive,” the bank said.
“In the future, the advantages and value of a token economy will become very apparent in terms of exponential progress in efficiency, productivity, governance and customer service,” UnionBank chairman Justo A. Ortiz said.
On Tuesday, UnionBank piloted its cross-border remittance service for local rural banks through blockchain.
The ninth largest bank in the country in asset terms posted a P2.16-billion net income in the first quarter, down 26% from P2.93 billion recorded in the same period in 2018.
UnionBank shares closed unchanged at P60 apiece on Thursday. — K.A.N. Vidal