The move aims to boost financial inclusion in the country.
Union Bank of the Philippines partnered with OCBC Bank to pilot what it claims to be the country’s first blockchain-based remittance service from Singapore to the Philippines.
In June, UnionBank utilised blockchain-based tokenised fiat to successfully remit from OCBC Bank in Singapore to an account holder at Cantilan Bank, a rural bank in Surigao Del Sur, by combining the features of both the Adhara platform and UnionBank-UBX's i2i platform.
The blockchain-based platform links the country’s rural banks to each other and to UnionBank, providing rural lenders access to value added services which can be ported through i2i.
Adhara's technology leverages tokenisation of money and smart contracts on permissioned, enterprise-grade Ethereum networks to allow banks to submit, clear and settle payments in real time with dynamic FX prices, and to efficiently manage their liquidity and FX risk globally.
"With the pilot's use of i2i, rural banks can now receive direct-to-account remittances, and this is only the beginning. With this connected platform, other value added services can now be made accessible to rural banks," said Arvie de Vera, UnionBank senior vice president and head of the fintech business group.
At present, the country’s rural banks have limited access to financial networks, making remittances from overseas to take five to seven days to be credited to a beneficiary's account. In this situation, the alternative for people residing in far-flung areas is to use non-bank remittance counters, which often require in-person transactions on the sending and receiving sides, and are subject to high fees.
UnionBank and OCBC are set to publicly demonstrate the system of remitting from Singapore to a Philippine rural bank via Adhara and i2i platforms at Singapore Fintech Festival in November
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