The Central Bank of the Philippines and some universal banks are exploring distributed ledger technologies like blockchain to speed up banking transactions.
According to BSP Governor Nestor A. Espenilla Jr, the Bangko Sentral ng Pilipinas is currently studying the potential of bitcoin and distributed ledger technologies (DLT) such as blockchain on how it can help traditional banking and its current wire transfers.
Distributed Ledger Technology is a form of database that exists in different locations or computing devices. Blockchain is a form of distributed ledger technology that organizes transactions records into “blocks”. Records are permanent and cannot be tampered. Because of “blocks”, it is possible to confirm which transactions happen first.
The governor shared that the BSP is working with key industry players and correspondent banks for a potential tie-up with distributed ledger technology (DLT) providers.
“We believe that collaboration and strengthening partnerships with other fintech players is a way to boost distributed capabilities of correspondent banks, … To grow markets in the midst of competition, new customer solutions through efficient operations should be delivered.” – BSP Governor Nestor A. Espenilla Jr.
The BSP governor believes that distributed ledger technologies will alleviate banking issues like risk, costs, and payment forms. He added that the blockchain is a good option in terms of transferring small-value payments.
Union Bank is currently testing a permission blockchain called Project i2i. It connects rural banks from one another via the blockchain, allowing these small banks to perform what universal banks can do, coursed through Union Bank.
Source: Philippine Central Bank