Unionbank of the Philippines: Launches Peso-Backed Cryptocurrency
Unionbank of the Philippines recently continued its sortie into the cryptocurrency and blockchain space, electing to launch a digital asset that is aiming to achieve “stablecoin” status.
While it is unlikely that the project, dubbed PHX, emulates the decentralized nature of Bitcoin and other grassroots digital assets, it marks a step in the right direction for the cryptocurrency space.
Crypto Boosted by Unionbank
Per a report from Filipino media outlet Philstar Global, Unionbank, with stablecoin PHX, has become the first bank in the Philippines to use blockchain technologies directly in its transactions. Discussing the details of the project, Unionbank senior vice president Arvie de Vera stated:
“PHX is a stable store of value, medium of exchange and is a programmable token with self-executing logic. It enables transparent and automatic execution of payments.”
He adds that all transactions made with the bank-backed cryptocurrency, which is backed one-for-one by Philippine pesos, will be conducted through a platform called “i2i”.
Unionbank’s model is a bit different than American banking giant JP Morgan’s strategy for JPM Coin. For those unaware, the firm earlier this year launched a stablecoin used for large financial transactions between global clients.
However, Unionbank has slightly deviated from JP Morgan, as it seems to be keeping payments within the Philippines border and allowing consumers to issue transactions. The bank has tested PHX with Summit Rural Bank, Progressive Bank, and other local institutions.
According to Philstar, since PHX is “interoperable”, it could be used across various global platforms and wallets in the future. But as it is very early in PHX’s life, no plans for the expansion of the project have been announced just yet.
Whether or not the Unionbank-backed venture goes worldwide, the Unionbank believes that PHX is a step towards the promotion of “inclusive prosperity” and is an overall value-add for its clients.
Not Its First Rodeo
As aforementioned, this isn’t Unionbank’s first rodeo in the crypto industry. It last showed its support for this budding class of new technologies when it became the first financial institution in the Philippines to integrate a two-way cryptocurrency ATM, allowing customers to purchase and sell assets like Bitcoin for pesos.
Union Bank purportedly collaborated with the Bangko Sentral ng Pilipinas (BSP), the nation’s central bank, to ensure that the newfangled offering is compliant. The Manila-headquartered institution, which has over 300 branches scattered across metropolises and the countryside, remarked:
“In the bank’s continued quest to cater to the evolving needs and tastes of customers, including clients who use virtual currency, the ATM will provide these clients an alternative channel to convert their pesos to virtual currency and vice versa.”
Also, Unionbank last year began to work with Ethereum development studio ConsenSys. The premise of this partnership was to purportedly integrate Ethereum platforms, namely one called Kaleido, for improved transaction settlement and data transfer.
Thus, it may be that PHX and i2i are actually derivatives of Ethereum technology and decentralized applications.
Stablecoins Hit the Mainstream
PHX’s sudden appearance underscores a growing trend in global finance: stablecoins. Large financial institutions, central banks, and even technology powerhouses are looking into creating their own digital currencies to bolster their bottom line.
Facebook, of course, is a perfect case in point, having unveiled the Libra white paper and a star-studded list of corporate partners. China, too, is looking into the stablecoin space, feeling the pressure of Libra as a potential medium which could usurp the Chinese Yuan’s hegemony.
Also, there has been some talk of Iran creating a gold-backed digital asset, Sweden tokenizing the Krona, and India potentially establishing a digital rupee.
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Nick Chong, Khareem Sudlow
