SINGAPORE - Media OutReach - 23rd July 2019 - Union Bank of the Philippines
(UnionBank) recently became the first Philippine bank to successfully pilot
blockchain-based remittance from Singapore to the Philippines. This was done in
partnership with OCBC Bank, Singapore's longest established bank, using the
Adhara liquidity management and international payments platform.
a continued push for financial inclusion for all Filipinos as aligned with the Philippine
government's mandate, UnionBank on June 27 used blockchain-based tokenized fiat to successfully remit from OCBC
Bank in Singapore to an account holder at Cantilan Bank, a rural bank in
Surigao Del Sur. This was made possible by combining the features of both the
Adhara platform and UnionBank-UBX's i2i platform.
According to Melchor Plabasan, Officer-In-Charge at
the Technology Risk and Innovation Supervision Department of the Bangko Sentral
ng Pilipinas (BSP), they anticipate greater adoption of blockchain and
distributed ledger technologies given their transformative potential,
particularly in reducing unnecessary points of friction in payments and remittance.
"Rest assured that the BSP will continue to support
initiatives aimed at creating an enabling remittance environment for our overseas
Filipinos. We look forward to exciting times ahead as we engage more
meaningfully for a modern, inclusive and progressive remittance landscape," he
Using blockchain technology for
bank-to-bank cross-border remittance promotes financial inclusion, particularly
in underserved areas, as customers will see significant cost savings and near
real-time transfers at the touch of a button. This is because blockchain's
advantage lies in it being a distributed ledger where transaction records are
accurate, immutable and transparent allowing for atomic verification and subsequently,
Mohanty, Chief FinTech Officer of the Monetary Authority of Singapore, said,
"We started working with the financial industry in 2016 through Project Ubin to
explore the potential of blockchain technology for payments. We are excited to
see this potential being realized, with cross-border remittances that are now
cheaper, faster, and safer through the i2i network," he said.
project will have deep economic and social impact for rural communities. We are
particularly thrilled as the Adhara team had worked on Phase 2 of Project Ubin
in 2017, and has leveraged the learnings to bring this meaningful project to
life," he added.
For his part, UnionBank President &
CEO Edwin Bautista said, "i2i, which is the blockchain platform and which
made the Philippine side possible, is now managed and operated completely by
UBX, the fintech subsidiary of UnionBank. Enabling this pilot is the creation
and use of UnionBank's commercial bank-backed tokenized fiat called PHX, which
will be officially launched very soon in the Philippines."
I2i is a blockchain-based platform
connecting rural banks to each other and to UnionBank. This
provides rural banks, which are currently financially excluded, access to value
added services which can be ported through i2i, thus enabling a banking-as-a-service
platform. The i2i platform aims to bring millions of unbanked Filipinos to the
financial system by connecting rural banks to the country's main financial
network through blockchain technology.
"With the pilot's use of i2i, rural
banks can now receive direct-to-account remittances, and this is only the
beginning. With this connected platform, other value added services can now be
made accessible to rural banks," said Arvie de Vera, UnionBank Senior Vice
President and Head of the Fintech Business Group. "This empowers rural banks
that were once financially excluded, with access to universal banking
At present, Philippine rural banks have
limited access to financial networks, and remittances from overseas can take five
to seven days to be credited to a beneficiary's account. The alternative for
people residing in these areas is to use non-bank remittance counters, which
often require in person transactions on the sending and receiving sides, and
are subject to high fees.
"We are very excited to work with UnionBank
and OCBC on this pilot, which demonstrates how tokenization and blockchain can
make international payments and liquidity management fast and efficient for
different market segments, providing competitive prices dynamically in real
time while fully complying with existing regulations and supervisory
requirements," said Julio Faura, founder and CEO of Adhara.
Adhara's technology leverages
tokenization of money and smart contracts on permissioned, enterprise-grade
Ethereum networks to allow banks to submit, clear and settle payments in real
time with dynamic FX prices, and to efficiently manage their liquidity and FX
Furthermore, at the Singapore Fintech
Festival in November this year, UnionBank and OCBC will publicly demo the
system with a remittance from Singapore to a Philippine rural bank via the
Adhara and i2i platforms.
"This is truly a step towards achieving our purpose of elevating lives and fulfilling dreams by
connecting and enabling communities. Blockchain and emerging technologies make
this possible at scale by collaborating with institutions on the
spot and promoting inclusion," added UnionBank Chairman Justo Ortiz, Ph.D.