The adoption of blockchain technology seems to be taking the world by storm as five banks in the Philippines contemplate using Visa’s blockchain payment platform. The agreement between the Union Bank of the Philippines and four other rural banks will adopt the new technology in order to boost the efficiency of the processes of their payments, based on Visa’s B2B connect.
The Senior Executive Vice President and Chief Technology and Operations Officer of the Union Bank, Henry Rhoel Aguda said,
We’re co-creating the blockchain platform to be used by the rural banks.
Right now, the deal is between five banks, but more could be included in the program in the future, according to Aguda. Union Bank, the country’s largest credit card provider, which launched a trial phase of the B2B blockchain payment system in November 2017. The B2Bconnect is aimed at easing cross-border payments between institutions, by allowing them to make payments directly without necessarily involving middlemen.
The Deal Doesn’t Extend to Bitcoin
However, the embracing of Visa’s blockchain payment doesn’t extend to Bitcoin, which is the invention that introduced the revolutionary technology. According to Alfred Kelly, the Visa CEO, the Union Bank has no plans whatsoever to add support for any cryptocurrency-based transactions.
“I don’t view [bitcoin] as payment system player,” Kelly said, adding that he thinks of Bitcoin as a speculative commodity rather than an actual currency.
Blockchain developments are cropping up everywhere following an overwhelming explosion of the technology and its benefits. Earlier in the week, we saw the central bank of Saudi Arabia joining hands with Ripple to allow banks in the country to utilize the enterprise software solution of the platform, in order to achieve more efficient cross-border payments.
Other financial institutions working with Visa to enable the business-to-business project are Singapore’s United Overseas Bank, South Korea’s Shinhan Bank, and the U.S.-based Commerce Bank.
What’s your take on the widespread adoption of blockchain by financial institutions globally? Do you think they should extend this adoption to cryptocurrencies in order to make cross border payments between banks even more efficient? Do you think this trend will continue? Share your thoughts with us today in the comments section below.