Rural banks in the Philippines are looking to adopt blockchain technology in bid to improve financial inclusion for local residents.
According to a report by the Philippine Information Agency on Wednesday, the initiative – dubbed Project i2i – is led by the Union Bank of the Philippines, one of the country's largest banking institutions, and will use the Kaleido blockchain platform developed by the ethereum startup ConsenSys.
The project was first revealed by Justo Ortiz, chairman of UnionBank, on May 15 at CoinDesk's Consensus 2018 conference in New York, and seeks to integrate rural banks with the country's major financial networks through a blockchain-powered retail payment platform.
Currently the project is being formally rolled out with seven rural banks, including Cantilan, one of the Philippine's largest community banks.
Today's report indicates that financial services such as interbank transactions in rural parts of the country – which is comprised of more than 7,000 islands – are still largely manually processed and paper-based because integration with the country's clearing house and the SWIFT network is "too complex."
Tanya Hotchkiss, executive vice president of Cantilan, was quoted as saying that a normal interbank transaction could take up to a month to arrive, since there are 25 procedures being handled manually.
The banks' blockchain exploration comes soon after a similar group effort led by Union Bank, which partnered with five Philippines rural banks to utiize credit card giant Visa's blockchain-based payment system to boost the efficiency of their transaction processes.
Philippines map image via Shutterstock