“Island-to-Island” | “Institution-to-Institution” | “Individual-to-individual”
The Philippines is a rapidly emerging economy with a population of over 100 million. However, two-thirds of the population remains unbanked. 70 million Filipinos have severely limited access to both the domestic and global financial ecosystems. This poses a significant problem when up to 10% of the Philippines’ GDP is made up of international remittances sent from overseas workers to family members across the country.
UnionBank of the Philippines, one of the largest banking institutions in the country, sought to tackle this challenge by partnering with ConsenSys Solutions, Kaleido, Amazon AWS, ConsenSys Diligence, Microsoft Azure, and seven rural Philippine banks to create an inter-rural bank payment platform using Enterprise Ethereum.
The Challenge
70% of Filipinos remain unbanked and have no access to a checking or savings account. One-third of the Filipino population lives on less than $2 a day, while 56% of Filipinos residing in rural communities have limited access to financial services. Operating outside of the banking system hampers upward mobility, long-term opportunities, and perpetuates poverty.
Unionbank of the Philippines launched a financial inclusion project with Project i2i to address the ongoing issue of unbanked citizens.
The Enterprise Ethereum Solution
UnionBank sought to partner with the 476 local banks already present with established relationships within the community. Unfortunately, the rural banks themselves were disconnected from electronic banking services and domestic money transfer networks, making it difficult for UnionBank to lay the groundwork for financial inclusion.
In turn, UnionBank worked with ConsenSys Solutions to plan and implement a pilot project utilizing blockchain technology in partnership with seven local banks. Project i2i implemented Enterprise Ethereum to create a decentralized, cost-efficient, real-time inter-rural bank payment platform that operates autonomously outside of existing payment infrastructures and intermediaries such as the Philippines’ PhilPass and SWIFT. The Project i2i platform works to connect rural banks as well as national commercial banks to the central bank, helping remote banks integrate with the domestic financial system while also improving banking access for local citizens.
Goals Achieved
The commercial launch of the i2i platform is scheduled for 2019, in partnership with 130 rural banks. Project i2i has received clearance and support from the central bank of the Philippines (Bangko Sentral ng Pilipinas) to operate as the country’s first Ethereum-based payment network for domestic funds transfers.
UnionBank and ConsenSys Solutions are now working toward expanding the platform to include international funds transfer, using technology developed from another ConsenSys Solutions initiative, Project Ubin. UnionBank is committed to achieving its goal of extending banking services to the underserved market of rural Filipinos.
