Five rural banks in the Philippines will hold a test of real-time retail payments system on a blockchain created by Ethereum startup Consensys.
In an effort to improve financial inclusion and bring on board 35 unbanked Filipinos into the financial system, the Union Bank of the Philippines (Union Bank) has selected five rural banks in Mindanao for a blockchain test that will experiment real-time, cheaper retail payments.
Known as ‘Project i2i’, Union Bank notes the move is to link rural banks to the country’s financial network.
Project i2i will assist to link rural banks with the country’s primary banking network and place them on equal grounds explains Union Bank.
“If you are a rural bank, you’re not connected to Bancnet and you’re not connected to SWIFT. In order for you to connect to them, you have to spend on the data center, cyber security infrastructure, so it’s very expensive,” Union Bank technology and operations chief Henry Aguda said disclosing the bank had invested $3 million in Project i2i.
“With this [blockchain platform], they don’t have to spend anything. They just have to load the application i2i on their computers, tablets, or smartphones then they can transact bank-to-bank connected to the blockchain.”
The bank is expected to draw in 100 banks from the country’s rural setting before the end of the year. “Hopefully, we could go above 100 [rural banks] before the end of this year … It depends on how fast the rural banks will adopt,”,
Union Bank has joined forces with New York-based Ethereum collective and startup Consensys for the trial which will commence with five rural banks. They include Cantilan Bank, Inc. of Surigao del Sur, PR Savings Bank, City Savings Bank, FairBank, and Progressive Bank.