The Bangko Sentral ng Pilipinas (BSP) governor Mr. Nestor Espenilla Jr. urges correspondent banks to invest in the blockchain technology. He stated that this may help solve some correspondent banking issues.
During the Association of Philippine Correspondent Bank (APCB) annual meeting, the BSP governor said that blockchain or distributed ledger technology (DLT) will have a huge impact on correspondent banking. This is why he stressed that banks should embrace this “wave of innovation and rethink strategies”.
Mr. Espenilla believes that this technology can alleviate some correspondent banking issues and can lead to better risk management, reduce costs, payment forms, and has the best use case for transferring small-value payments.
The BSP Governor also added that the BSP is currently working with key industry players and market innovators for potential tie-ups with DLT providers.
“We believe that collaboration and strengthening partnerships with other fintech players is a way to boost digital capabilities of correspondent banks.” – Mr. Nestor Espenilla Jr., Governor, BSP
A new project was also recently approved using a test-and-learn approach. It is a real-time domestic and overseas remittance corridor that will facilitate remittance without the need for a central operator. He said that this will be beneficial to the country’s remittance industry.
In addition, he also shared that the Bankers Association of the Philippines (BAP) is also launching a project that will develop digital IDs using blockchain technology.