UnionBank to launch stablecoin this year

The Union Bank of the Philippines on Monday said it has scored the approval of the Bangko Sentral ng Pilipinas (BSP) to launch a stablecoin, which the Aboitiz-led lender said it seeks to do within the year.

"We have BSP approval to launch stablecoin," UnionBank president and CEO Edwin Bautista said at a press conference in Pasig City.

A stablecoin is a cryptocurrency pegged to another stable asset such as gold or the US dollar, which minimized volatility compared with the other cryptocurrencies such as the bitcoin.

According to Bautista, the stablecoin will be done through the company's i2i service which currently runs on ConsenSys' Kaleido platform.

Project i2i, which stands for island-to-island, institution-to-institution, and individual-to-individual, is UnionBank's clearing system that connects rural banks through blockchain technology.

"We will eventually link i2i Philippines to similar clearing systems in other countries. All you have to do is to move tokens across the different platforms. That's the bigger plan down the road," said Bautista.

Sought for more details on the service, UBX president and CEO John Januszczak said the company targets to roll this out within 2019.

"We're already BSP approved for the stablecoin, so it's really at this point a matter of development work and testing," he said.

UnionBank on Monday also launched its wholly-owned financial technology company, UBX Philippines Corp., which will house the bank's technology initiatives, platforms, and investments in fintech companies.

UBX will focus on embedded banking which refers to banking made through a platform other than a bank, such as mobile applications and the internet of things.

"One of the numerous advantages of being a fintech company today is that regulation is not as strict compared to banks," said Januszczak.

"This allows more room for thinking 'outside-the-box' and implementing new services that those in traditional banking and finance may consider too 'out-in-left-field.' That is what we want to happen with UBX," he added.

With this, UBX has committed some P500 million annually to either incubate or buy into new technology ventures as it seeks to gain its footing in the industry.

"That's a number that is not cast in stone. It could be even higher, if there are no interesting projects for the year it could be lower," said UBX Chairman of the Board Henry Aguda. — RSJ, GMA News