Author – Mil
It looks like the blockchain technology is slowly making its way into mainstream adoption. A news article from the Philippine News Agency reports that four rural banks have partnered with Union Bank to develop a blockchain technology-based payment system.
Union Bank officials vow that they aim to help smaller banks in terms of improvement in efficiency. In a briefing, Senior Executive Vice President and Chief Technology and Operations Officer for Union Bank, Henry Rhoel Aguda, said that they are helping rural banks, “elevate their capabilities.” Aguda adds, “We’re co-creating the blockchain platform to be used by the rural banks.”
Union Bank and Visa B2B Connect Platform
Union Bank is the first bank in the Philippines to be chosen by Visa for Visa’s B2B Connect platform, which is a business solution that enables financial institutions to provide service to clients with fast and secure cross-border payments. This platform uses the blockchain technology to transfer money almost instantly, instead of the usual delay of three to five business days. Using the blockchain also lessens the costs versus existing methods.
Some of the banks also tapped by Visa for initial implementation are Commerce Bank in the United States, Sberbank in Russia, Shinhan Bank in South Korea, and the United Overseas Bank of Singapore. Later this year, Visa is set to launch the platform.
From Rural Banks to SMEs
According to Aguda, they will be focusing on their partnership with the four rural banks, but assures that they are not closing doors for more partnerships for this business solution platform.
“We want to grow from four right now to as many as we can support,” Aguda added.
Aside from rural banks, Union Bank President and CEO Edwin Bautista said that they were also targeting to partner with small and medium enterprise (SME) partners of their current clients as prospect tie-ups for this system.
The Rise of the Blockchain Technology
The blockchain technology was conceptualized in 2008 by a person or a group of person only known as Satoshi Nakamoto. It was not until recently that the blockchain was given much attention. The blockchain technology came into the mainstream spotlight through the rise of cryptocurrencies in 2017, namely the boom in Bitcoin prices during the last quarter of 2017.
Although there have already been many developments coming from the blockchain, we have only merely scratched the surface in terms of its potentials. With major financial institutions now exploring the potentials of the blockchain, we can expect more innovations in the near future.
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