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After last year’s pilot project in collaboration with the Ethereum-based startup ConsenSys, Philippine’s UnionBank now has its own cryptocurrency, reports local news outlet The Philippine Star.
Arvie de Vera, Senior Vice President of UnionBank confirmed that not just the cryptocurrency, in the form of a stablecoin called PHX, has been launched, but PHX transactions have also been enabled across rural banks. Actions of PHX buying, transferring, domestic remittance and redemption transactions with the rural banks were done via a special connection with UnionBank (more on that below).
In addition, de Vera said how PHX would ensure stable, transparent and automatic transactions. This recent development is a step by UnionBank to make efficient and fast transactions available to its users in rural areas. It aims to provide “financial inclusion” by introducing this cryptocurrency.
UnionBank is one of the Philippines’ top ten major banks. Last year it reported $140 million worth of earnings, has become the country’s first bank to implement blockchain technology, and started dispersing crypto ATMs across the country. Since PHX is backed by a conventional asset, it makes it less volatile than regular cryptocurrencies. Also known as a “stablecoin,” such cryptocurrencies are pegged to already existing stable financial assets, which in this case would be the Philippine peso. This makes the digital currency more stable.
Crypto Trafing via Platform Connected to Rural Banks
In the report by Philstar, de Vera stated “Governance is assured by design. Reconciliation challenges of the past are no longer an issue. Meanwhile, audit and compliance are made easier.”
According to him, PHX uses i2i platform to connect listed banks with rural banks; i2i is UnionBank’s clearing system that uses blockchain technology to connect to the rural banks. This network was used to make transactions by three rural banks: Progressive Bank, Summit Rural Bank and Cantilan Bank.
Initially, PHX is only available to i2i users. They can buy the virtual currency by debiting directly from their UnionBank accounts. Users can also easily convert PHX to Philippine’s peso through their bank accounts. In the future, PHX is expected to be used across different platforms and wallets. Its conversion will not be limited to peso but will be able to cater to all global currencies.
Recent developments in the financial realms prove that at least some banking authorities are not against cryptocurrencies. For example, some of Australia’s biggest banks are now experimenting with blockchain technology.
Banks and financial institutions don’t like to give up control. They are against the idea of decentralization by default, which makes digital currency less stable. Once the instability problem is solved, cryptocurrency can revolutionize the banking systems of the world.