The pilot ethereum-based blockchain initiative for real-time retail payments welcomes at least five new members: rural banks in Southern Phillippines. The project is being rolled out by the Union Bank of the Philippines (UnionBank). They do so in collaboration with US-based blockchain software technology firm ConsenSys.
UnionBank chair, Justo Ortiz said that the project, which was baptized I2I, aims to bring an estimated 35 million unbanked Filipinos into the financial system. He added that the initiative is also looking forward to connecting the country’s rural banks into the domestic financial network.
Ortiz said: “The i2i Project is a real-time, cost-effective and secure retail payment system in the blockchain,” he noted, adding that blockchain could “crack the hole of financial inclusivity.”
The pilot run will include at first PR Savings Bank, City Savings Bank, Cantilan Bank of Suriago del Sur, Progressive Bank and FairBank. The five rural lenders have received approval from the Philippine central bank, to join the pilot program.
Early this month, UnionBank revealed its plan to interconnect rural banks through blockchain. The application of the technology in the system is expected to reduce the number of steps in some transactions from the current 20 to just three.
In order to contextualize it, rural banks are retail banks operating in the countryside with the duty of servicing communities usually supervised by the big banks and other financial institutions. These rural institutions are not linked to the country’s interbank network and are not members of Bancnet. In addition, they do not belong to the Philippines Clearing House, which means they cannot issue checks. At least 554 out of 1,634 municipalities and cities in the Philippines remain unbanked.
Aiai Garcia, Asian head of ConsenSys Solutions added that along with his partners, UnionBank will be using the Kaleido platform. This is actually the first blockchain to use the Ethereum network.
UnionBank is ConsenSys’ first bank client in the Philippines. Garcia said: “Our appetite for experimentation is warming the country up for significant transformational change for the next generations to come.”