Edwin Bautista, president and CEO of UnionBank of the Philippines, has predicted that the coronavirus outbreak will prompt banks to switch to digital currencies, leaving physical money behind.
As Euromoney reported on April 3, Bautista noted that the pandemic caused increased demand for online banking services, forcing banks to review their digitization strategy. “This pandemic certainly increases the need for all banks to work digitally now,” said Bautista.
Ahead, the director predicted the beginning of the end of hard cash, especially if central banks fail to deliver banknotes and coins to banks and ATMs. Bautista stated:
“An important awareness here is that the longer the disruption, the slimmer the traditional money supply chain becomes. So I expect banks to be more open to testing, developing and deploying digital cash and currency, QR codes and maybe even cryptocurrencies and digital tokens. ”
“The crisis will accelerate the transition to digital,” meaning “a great new opportunity for banking,” said Bautista.
UnionBank has indeed demonstrated a proactive approach to blockchain-related developments. Last July, the bank launched a payments-oriented stablecoin linked to the Philippine peso. The coin, called PHX, is designed to function as “a stable store of value, medium of exchange and is a programmable token with self-executing logic”.
That same month, UnionBank successfully tested a blockchain-based cross-border transfer from the Philippines to Singapore. The project ultimately aims to provide millions of non-bank related Filipinos with the opportunity to use financial services by connecting rural banks to the country’s main financial network.
Meanwhile, other world banks continue to develop their own digital currencies. The Bank of France has officially launched an experimental program to test the integration of a central bank digital currency (CBDC) for interbank settlements, while the Bahamas have announced plans to adopt a CBDC by 2020.