Enthusiasm for cryptocurrencies prompts bank in Philippines to launch trading in Bitcoin, more
Union Bank of the Philippines plans to offer trading and custodial services for cryptocurrencies.
Union Bank of the Philippines plans to offer trading and custodial services for cryptocurrencies to capitalize on fast adoption of digital tokens in the Asian nation. The average Filipino investor will likely hold 3% to 5% of their personal assets in digital assets like Bitcoin in five years assuming markets are “stable,” up from around 1% to 2% now, said Cathy Casas, head of the bank's blockchain and application programing interface group. Many crypto investors are young people, some of whom earn tokens from play-to-earn virtual games, she said.
“It's a way to future-proof our banking business,” Casas said in an interview.
About 5% of the local population have dabbled in cryptocurrencies, Casas estimated. That's in line with the global average, according to an estimate from Binance Holdings Ltd., operator of the world's largest cryptocurrency exchange.
Like in most countries, cryptocurrency has its critics. Philippine central bank Governor Benjamin Diokno has cautioned against cryptocurrencies, saying they could “pose a danger to the financial system” as they are “very vulnerable” to illicit activities like money laundering and terrorist financing.
Regulators around the world have taken notice of crypto's rapidly growing appeal, and some are taking steps to limit marketing to consumers. Singapore this week told companies in the sector to stop most consumer-facing marketing, citing concerns that retail traders might get burned. Bitcoin has lost nearly 40% from its November peak, after jumping more than fourfold over the previous 12 months.
“We are making efforts to educate our clients also via social media, making sure that they are safe,” Casas said.
The bank's custodial services for digital assets will also be capable of covering tokenized bonds, Casas said. In 2019, UnionBank became the first Philippine lender to launch its own stablecoin -- called PHX -- providing rural banks in its network easier access to remittances and payments.
UnionBank will use a system developed by Switzerland's Metaco for managing its digital-asset operations, according to a statement from Metaco on Thursday.