One of the largest banks in the Philippines is launching a pilot test to see how the Ethereum blockchain can increase the security and transparency of its transactions. To do so, UnionBank is partnering with ConsenSys, to utilize Kaleido, an enterprise blockchain solution launched on top of the Ethereum blockchain protocol, to process information and transactions more securely and transparently.
Dubbed ‘Project i2i’ – island-to-island, institution-to-institution, and individual-to-individual – Union Bank says the initiative is to connect rural banks to the country’s main financial network.
The i2i Project seeks to bring unbanked Filipinos under the mainstream financial system, and link rural banks into the country’s financial network, UnionBank chair Dr. Justo Ortiz said.
“The i2i Project is a real-time, cost-effective and secure retail payment system in the blockchain,” Ortiz said, adding that the technology can help “crack the hole of financial inclusivity.”
The rural banks function as financial facilitators in areas that are out of reach from the country’s primary financial system. These banking institutions aren’t members of Bancnet, the country’s interbank network, nor do they belong to the Philippines Clearing House, negating them from issuing checks. According to the Bankgko Sentral ng Pilipinas, the central bank, 554 out of 1,634 cities and municipalities in the Philippines remain unbanked.
Project i2i will help connect rural banks with the country’s primary banking network and put them on a level playing field, Union Bank says.
Officially unveiled earlier this month, Kaleido is a new Blockchain Business Cloud aimed at speeding and simplifying enterprises’ journey to using the technology. It is the first Software-as-a-Service featuring popular Ethereum packages Geth and Quorum. Justo Ortiz said,
“Our team was inspired to harness blockchain in order to reach farther into our rural communities of the Philippines. Many people are still financially excluded and we’re looking to change that. In partnership with ConsenSys and running on the Kaleido platform, we successfully accelerated Project i2i into active pilot without the complexity and cost of starting from scratch,”
For this initiative, five rural banks in Mindanao have been also selected, which includes
- Cantilan Bank
- PR Savings Bank
- City Savings Bank
- Progressive Bank.
They have the required approval from the Bangko Sentral ng Pilipinas to participate in the pilot project.
Alai Garcia, ConsenSys Solutions Lead in Asia Pacific, said that UnionBank is their first bank client in the Philippines and that the country could be one of the few regions in the world that could maximize the benefits of using the blockchain as both public and private sectors are keen on applying blockchain technology to existing systems.
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