By James A. Loyola
Rizal Commercial Banking Corporation (RCBC) is issuing a virtual currency in partnership with IBM to provide a better and faster remittance platform for overseas Filipino workers.
In a statement, the bank said it will soon issue fiat currency-backed stablecoins. RCBC is one of six banks around the world that expressed intention to issue stablecoins on IBM‘s World Wire.
Stablecoins are virtual currencies that carry fixed values as they are pegged to a particular currency, and World Wire has the capacity to simultaneously clear and settle cross-border transactions to almost real-time efficiency.
Both these attributes will render international remittance transactions faster and easier for RCBC’s clients and partners beyond Philippine borders, and will greatly benefit Filipinos working overseas.
“RCBC is pleased to be an early innovator with our intent to issue our own Peso stable coin on World Wire, pending final approval from our regulators,” said RCBC Global Transaction Banking Group Head Emmanuel Narciso.
He added that, “we’re focused on innovation that adds value to our customers and partners, and World Wire presents a tremendous opportunity to transform and enhance our payment infrastructure.”
To date, OFWs are charged between two and seven percent for every $200 dollar sent home from abroad. At times, foreign currencies sent from abroad are also affected by the foreign exchange difference in the country as against the local currency’s value in the international market.
“This ultimately results in a lower value remitted to OFW beneficiaries. While the amounts may seem small, when converted to local currency the charges do hurt their pockets,” Narciso said.
With stable coins, OFWs can buy coins using their dollars or any foreign currency on hand and send it to their relatives in the Philippines for redemption.
“If an OFW buys $1,000 worth of Philippine peso stable coins and the coins are priced at P50 per coin, the OFW gets 20 coins. He can send these coins to the Philippines, and his loved ones can redeem the coins in Peso value which is P50,000,” Narciso explained.
Through this platform, RCBC will help reduce the cost of sending money from abroad via a more secure channel.
To date, World Wire is present in 72 countries and exchanges 48 currencies in partnership with 46 banking channels which includes banks and remittance companies.