The Union Bank of Philippines plans to open a custodial service for cryptocurrencies as the asset class becomes increasingly popular among the local population.
As cited by Bloomberg, Cathy Casas, the bank’s head of blockchain and applications coordination department, outlined the institution’s plans recently. The top exec explained that it is a necessary strategy employed to secure the future of the organization.
This decision took cognizance of the fact that 1% to 2% of all Filipinos hold crypto assets. With the increasing interest in the asset class, it is estimated that up to 5% of the population could be investing in cryptocurrencies in the next five years.
Casas explained that most of the crypto adopters are the younger generations, who own tokens and also earn some profits through play-to-earn gaming platforms.
An estimation by Binance, the largest cryptocurrency exchange, shows that there are more Filipinos holding cryptocurrency assets than the average global average. The exchange estimates that one in every five Philippines nationals have dabbled with cryptocurrency assets.
The planned service by the Union Bank of Philippines will consist of tokenized bonds issued to its customers.
“We are making efforts to educate our clients also via social media, making sure that they are safe,” Casas said.
The organization expects a seamless delivery considering that it is the first bank in the country to launch its own stablecoin, PHX, in 2019. The PHX is helping to reach the unbanked in rural and difficult to access areas of the country, the bank said.
As the awareness of cryptocurrencies grows, regulators have their work cut out as they continue working towards limiting marketing to retail consumers, warning of the risks associated with the assets.
The governor of the Central Bank of The Philippines, Benjamin Diokno, warned that digital assets could “pose a danger to the financial system.” He added that investing in them is vulnerable, considering it could create more room for illicit activities that sabotage the economy.
Featured Image Courtesy of Philippine Star