Banks are now looking at the blockchain as a way to improve efficiency across their systems. However, they are still cautious on cryptocurrencies.
According to Mr. Nestor Tan, president of BDO, one of the advantages of the blockchain is its cost efficiency. Another one is that it lessens reconciliation (using a different set of records to ensure that the numbers/figures are correct and in agreement). To him, at some point, the banks will move to the blockchain.
BDO, along with other members of the Bankers Association of the Philippines (BAP), are in agreement when it comes to cryptocurrencies. “I am not a believer in cryptocurrency,” said Jaime Agusto Zobel de Ayala, chairman of Bank of the Philippine Islands (BPI). However, he considers blockchain as something that will become a new platform where transactions will happen and be recorded.
One key problem with cryptocurrencies such as bitcoin is its extreme volatility. The price today may not be the price tomorrow. Because of that its “ability to be an alternative to regular currencies is very small,” said Cezar Consing, president of BPI.
While banks remain just interested in the blockchain, other banks are already testing it. Union Bank has been using the blockchain to connect rural banks to each other and to Union Bank. This allows faster transactions to happen in these rural banks and to improve banking efficiency in areas outside the cities.
The Bangko Sentral ng Pilipinas remains cautious as well with cryptocurrencies. However, instead of hindering crypto development in the country, it developed an engaging but not prohibitive approach to this development. The BSP, though, maintains that it does not endorse cryptocurrencies.
Source: Phil Star