We've gradually been seeing an increased amount of institutional interest in the application of blockchain technology in the world of commerce, especially on an international level. Two companies and projects come to mind - these being JP Morgan's JPM Coin and Facebook's Libra come quickly to mind.
But one standout solution is coming from the Philippines UnionBank, which is making some interesting history with the launch of its own fiat-backed stablecoin known as PHX. While Gemini's and Tether's currencies have a peg to the US Dollar, the PHX, according to UnionBank's senior Vice President Arvie De Vera, will be backed by the Philippine Peso.
“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.”
One of the considerable advantages that this stablecoin solution provides for domestic clients, business or otherwise, is rapid and more cost-effective payments and remittances. Being backed by blockchain means that banks can side-step a lot of the associated costs of committing these payments the 'old-fashioned' way.
Rather than being theoretical, UnionBank managed to successfully test this solution relatively recently. With the transaction taking place on its i2i payment system, which connected with three rural banks interspersed across the countries island chain.
Having since proven highly successful, this stablecoin solution will now be rolled out and made available to UnionBank customers. These same clients can obtain PHX through a typical debit to their accounts, allowing them to make streamlined payments domestically for the time being.
The company has some long-term ambitions for the project, seeking to expand the accessibility of PHX. With the company seeking to make it accessible across a wide range of banks, digital wallets and platforms both within the Philippines and internationally.
Having this news come from UnionBank hardly comes as a surprise, however. Over the last couple of years, the company has expressed considerable and growing interest in the application of blockchain technology. One of its first peer to peer virtual currency ATM was actually tested out back in February 2019, predominantly in direct response to the emerging need for an efficient remittance system.
Above other industries, international payments and remittances continue to set the tone and demand for innovation in the banking sector, especially when it comes to digital currency application.
For Filipino citizens, it's an especially pressing matter. With more than 10 million of them living abroad with family based on the islands, there is a huge market waiting to be filled by a cost-effective and dynamic blockchain remittance system.