Banks in Philippines Will Be Testing Ethereum-Based Blockchain for Retail Payments
One of the biggest banks in the Philippines - UnionBank has collaborated with Ethereum startup Consensys. This partnership is a part of an initiative of connecting the country’s rural banks to its mainstream financial network as a part of which 35 million citizens will be included in the country’s economic structure.
The UnionBank is said to have picked five rural banks from the country’s second-largest island called Mindanao in order to test cheaper and real-time retail payments. The project has been dubbed as ‘Project i2i’ which refers to island-to-island, institution-to-institution, and individual-to-individual.
Moreover, the rural banks have been able to establish reach in remote areas where they work as financial facilitators. The UnionBank said that the ‘Project i2i’ will help the inclusion of rural banks in the country’s primary banking network while putting them on a level playing field.
Union Bank technology and operations chief Henry Aguda said that the bank has invested nearly $3 million in this project. Henry said: “If you are a rural bank, you’re not connected to Bancnet and you’re not connected to SWIFT. In order for you to connect to them you have to spend on data center, cyber security infrastructure, so it’s very expensive.”
He further added that “With this [blockchain platform], they don’t have to spend anything. They just have to load the application i2i in their computers, tablets, or smartphones then they can transact bank-to-bank connected to blockchain.”
The use of low-cost blockchain technology will be very beneficial as it provides security, transparency, robustness and efficiency in processing transactions.
The UnionBank said that it expects over a hundred bank from the rural areas to be absorbed in the country’s mainstream financial network. “Hopefully, we could go above 100 [rural banks] before the end of this year … It depends on how fast the rural banks will adopt.”
In order to implement the ‘Project i2i’ the UnionBank will make use of Kaleido blockchain software which is an enterprise service platform launched by Consensys in partnership with Amazon Web Services (AWS). The Kaleido platform is built on the top of Ethereal blockchain protocol in order to process transactions and information in a more secure and transparent manner.
Alai Garcia, ConsenSys Solutions Lead in Asia Pacific, said that this is one of the very key projects for the company considering the view that Philippines is set for a big inclusion of its citizens in the country’s financial economy. Garcia said: “Our appetite for experimentation is warming the country up for significant transformational change for the next generations to come.”