Provincial banks in the Philippines are planning to implement blockchain technology to improve the quality of financial services provided to local residents. It is important to note that the island country's interbank transactions are still processed manually.
According to a report by the Philippine News Agency on Wednesday, the initiative, dubbed Project i2i, is led by Union Bank of the Philippines, one of the country's largest banking institutions, and will use the Kaleido blockchain platform developed by Ethereum startup ConsenSys.
The project was first announced by UnionBank Chairman Justo Ortiz on May 15 at Consensus 2018conference in New York. The project will ensure the integration of provincial banks with the country's largest financial networks through a platform for retail payments based on blockchain technology. Currently, seven provincial banks are officially collaborating with the project, including the largest, Bank Cantilan.
Interbank transactions in rural areas of the country, which consists of more than 7,000 islands, are still largely processed manually in paper format, as integration with the country's clearing house and the SWIFT network has not occurred at these banks. Tanya Hotchkiss, executive vice president of Cantilan Bank, said a typical interbank transaction can take as long as a month because such a transaction consists of 25 procedures that are processed manually.
Banks became interested in blockchain technology after Union Bank began exploring the use of the technology and suggested that several rural banks use the blockchain-based Visa payment system to improve the efficiency of the transaction processing process.
You May Also Like
Mt Gox exchange client sues Japanese bank Mizuho
According to local sources, the Japanese financial institution Mizuho Bank is accused of defrauding the deposits of clients of the Mt Gox exchange who hoped to withdraw their funds after the collapse of the exchange.
Why the Fed opposes the creation of national cryptocurrencies
At the November fintech festival held in Singapore, Christine Lagarde, director of the International Monetary Fund, spoke positively about the idea of creating cryptocurrencies by central banks (CBDCs - Central Bank Digital Currencies). At the event, she highlighted some of the benefits of CBDC, which include financial inclusion, privacy and security.
