UnionBank PR | July 29, 2019
UnionBank marked another trailblazing milestone in promoting inclusive prosperity through blockchain technology by being the first bank in the Philippines to implement a stablecoin use case on July 25. PHX, the UnionBank-developed peso stablecoin, was implemented on the i2i platform which connects rural banks to one another and to UnionBank.
Stablecoin is a cryptocurrency that has been designed with the aim of minimizing price volatility. Most stablecoins have been designed to be equal to the US dollar, the world’s leading reserve currency.
“Stablecoins utilize the technology behind cryptocurrency. Behavior of these mirrors that of fiat because it is always worth the value of the underlying fiat currency, hence, no volatility,” said Edwin R. Bautista, CEO and President of UnionBank.
With UnionBank as the issuer for PHX, its value is bank-backed and guaranteed to be at parity with the Philippine Peso at all times.
“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,” said Arvie de Vera, Senior Vice President and Head of the Fintech Business Group of UnionBank. “Governance is assured by design. Reconciliation challenges of the past are no longer an issue. Meanwhile, audit and compliance are made easier.”
Successful live transactions were conducted using PHX were executed by three rural bank participants on the i2i network, namely: Summit Rural Bank in Luzon, Progressive Bank in Visayas, and Cantilan Bank in Mindanao.
Each of three rural banks performed buy, transfer and redemption transactions for PHX. The three banks were also able to conduct domestic remittances to one another using PHX.
As a start, PHX will be made available to i2i participants. They will be able to buy PHX on i2i by directly debiting from their UnionBank accounts. Participants will also be able to easily redeem PHX for Philippine Peso and have the funds credited to their UnionBank account.
As PHX is designed to be interoperable, in the future it may be used across various platforms and wallets, not just in the Philippines but globally as well. This has the potential to make transactions, payments and other use cases more accessible, efficient and inclusive.
“In the future, the advantages and value of a token economy will become very apparent in terms of exponential progress in efficiency, productivity, governance, and customer experience,” said UnionBank Chairman Justo A. Ortiz. “To be sure, there are challenges but anything worthwhile is difficult. We shall overcome. PHX is the first step at owning the future,” he added.
UnionBank aims to fulfill its purpose of promoting inclusive prosperity and add value for customers and communities through innovative solutions in support of the Bangko Sentral ng Pilipinas’ digital financial inclusion advocacies, and in compliance with all applicable regulations.