Updated on May 20, 2019 with RCBC’s comments
March 19, 2019 – Global firm and blockhain solutions provider IBM announces IBM Blockchain World Wire, a blockchain-based global payments network designed to process transactions in real time. The Philippines’ Rizal Commercial Banking Corporation (RCBC) have signed a letter with the multinational company intending to launch their own stable coins backed by the Philippine Peso on the IBM World Wire.
In a press release, IBM claims World Wire as the first blockchain network to integrate payment messaging and settlements on a single unified network “while allowing participants to dynamically choose from a variety of digital assets for settlement.”
These digital assets are stable coins backed by the participant’s fiat, which is often the participant’s country’s legal tender. For example, RCBC’s letter signified an intention to launch a stable coin backed by the Philippine Peso. (Read More: The Best Cryptocurrency Wallets to Use in the Philippines)
Currently, World Wire’s cross border network spans 72 countries, 44 banking endpoints, and 47 currencies. The fast cross border payment is made possible through the Stellar protocol, which has been proven to make settling of payments faster, often in mere seconds. This simplified approach, IBM said, will improve operational efficiency, manage liquidity better, streamline payment reconciliation, and reduce transaction cost.
To better describe how this works, imagine two banks from different countries. These institutions may use a stable coin to bridge money between two fiat currencies. The digital asset will then facilitate the trade and will supply important settlement transactions. Participants may use their existing payment systems, connect them to World Wire API so that their fiat currency can be converted to digital asset. All transaction details will be recorded to the blockchain. (Read More: Philippines Central Bank Studying the Possibility of Issuing its Own Digital Currency)
RCBC First Senior Vice President Manny T. Narciso said the initiative will add value to their customers, and that the World Wire is an opportunity for the bank to transform and enhance their payment structure.
“RCBC is pleased to be an early innovator with plans to issue our own Peso stable coin on World Wire, pending final approval from our regulators,” – Manny T. Narciso, First Senior Vice President, RCBC
Update: New comments from RCBC reveals that one intent of their issuance of stablecoin is for the benefit of OFW beneficiaries (people who receive money from OFWs). Because the transactions will become faster and middlemen are eliminated, it will result to cheaper transaction fees, Mr. Narciso said that while these fees may look small, when converted to Pesos, it’s actually worth a lot.
This news brings RCBC as one of the few banks in the Philippines and in Southeast Asia to have a public news release regarding blockchain. It should be noted though that this particular news came from IBM with a statement from RCBC. It was mid-last year when RCBC publicly mentioned its partnership with IBM for a “blockchain test”.
A number of blockchain-based e-wallet apps in the Philippines, including Coins.ph and TagCash have integrated the Stellar blockchain into their services.
This article originally appeared on BitPinas: Pending Regulatory Approval, Philippine Bank RCBC Signs Letter of Intent with IBM to Issue Peso-backed Stable Coin
This is a developing story.