Union Bank Said CryptoCurrencies Are The Future
Union Bank of the Philippines is the only one of 11 banks in the country to have a good recievement of blockchain and cryptocurrencies, expecting them to play a major role in the financial market space. When asked why, CEO and president Edwin Bautista told “It’s the future.”
Bautista said on the sidelines of the launch event for XLOG, a homegrown blockchain-based logistics solutions platform.
“We really do not know if cryptocurrency will be the future currency and replace fiat. No one knows for certain. But what if it would be? We have to keep an open mind about it. We cannot reject something just because we do not understand it,” Bautista said.
At the same time, Bautista declared Union Bank was considering accepting cryptocurrencies as payment. If this happens, it will become the first bank in the country to fully embrace digital currencies in its transactions.
He explained he didnt see any regulatory issue with the move since the central bank, Bangko Sentral Pilipinas (BSP), does not consider virtual currencies legal tender.
“What the central bank is saying that any transactions involving cryptocurrencies are between the two parties. It’s like bartering. So, I don’t see any problem with that if we accept it as payment,” he said, going on to declare, “If anybody here pays me in Bitcoin, I will accept it.”
In addition, Bautista disclosed that his bank was mining cryptocurrencies, further underscoring the institution’s acceptance of the digital assets.
However, he said the crypto mining operation is still unprofitable when all expenses are considered, including electricity bills and salaries.
To illustrate the issue, Bautista said that Union Bank’s mining rig ERB No.10 (using his initials) yielded $6 in profits from five days of operation but racked up an electricity bill of $4.6.
“Like what everybody says, cryptocurrency is not for everyone. It’s speculative and risky but is capable of giving you high rewards. Invest only what you are ready to lose,” he reminded the audience.
Union Bank building cross-border B2B payment system on blockchain
Union Bank is one of the early adopters of blockchain technology. In January this year, the bank partnered with card payment processing giant Visa to launch a blockchain-powered cross-border platform that will facilitate bank-to-bank (B2B) transactions focusing on small and medium-sized enterprises (SMEs).
Bautista said the partners are on track to unveil VisaB2B Connect in the last quarter of this year.
“Our technical team is now in Singapore to prepare for its launch,” Bautista said. Once live, VisaB2B Connect is expected to reduce transaction costs by nearly 55%, he added.
Also, Union Bank led an initiative to push for the adoption of Visa’s blockchain payments platform and partnered with four rural lenders to assist smaller players in becoming more efficient.