Aboitiz-led Union Bank of the Philippines (UnionBank) announced on Thursday, Aug. 11 that it will offer virtual asset exchange services via its mobile banking app, part of future-proofing the bank and to prepare it for the metaverse.
UnionBank is the first universal and commercial bank to offer virtual asset exchange services through its app to improve its “customer-centric solutions powered by technology and innovation.”
"This is also one of the things that we are working on as we prepare our path towards entering the metaverse," according to UnionBank’s Henry Aguda, senior executive vice president and its chief technology and transformation officer. Metaverse in banking will help it expand its virtual space such as cryptocurrencies and other virtual asset exchanges.
Aguda said that by launching this new feature in their app, the bank is “hitting two birds with one stone” since “not only does this help us ensure (we are) more future-ready, we are also able to serve the needs of our customers who use cryptocurrencies.”
The bank is currently exploring new use cases for the blockchain technology such as cryptocurrency. “This also aligns with the bank's efforts in expanding its footprint in the metaverse, after its first entry into the space through its partnership with homegrown NFT game Ark of Dreams last April. The bank is also eyeing the launch of the country’s first-ever Metaverse Center of Excellence sometime in the next few months,” said Aguda.
Cathy Casas, the bank’s head of blockchain, digital asset markets and API marketplace, said blockchain is a technology to power the future of banking. “At the same time, we also recognize that cryptocurrency has been one of the services that a lot of customers are already looking for, especially the younger generation, and this demand was accelerated by the pandemic," she said.
The new app feature allows UnionBank customers to buy and sell bitcoin directly from the mobile banking app without the need for a third-party virtual asset wallet. There will be no need for multiple apps. For now, the ability to buy and sell bitcoins will be randomly pre-selected among UnionBank customers.
UnionBank is one the first big banks to digitize its services and products about a decade before the pandemic. It has a new subsidiary, UnionDigital, one of the six digital banks in the country which has just started its operations this year.
The Bangko Sentral ng Pilipinas (BSP) supervises virtual asset service providers (VASPs). It also has jurisdiction over cryptocurrency-related activities that cover VASPs. As such, the BSP is closely watching how the blockchain non-fungible tokens (NFTs) are being used to pay for goods and services.
For now, the BSP’s regulatory framework for VASPs allows end-users to exchange fiat currency to crypto assets to acquire NFTs such as for game applications and to convert the same back into fiat currency.
BSP Circular No. 1108 or the Guidelines for VASPs basically recognizes the evolving virtual asset systems or markets, and its attendant risks due to its anonymity, volatility of prices and “velocity” of transactions. Once fiat money is exchanged or converted into virtual assets, it is easily transferrable and used for payment, and this is why VASPs are considered as money service businesses and under BSP regulation.