Union Bank of the Philippines (UnionBank) Senior Executive Vice President, Chief Technology and Operations Officer and Chief Transformation Officer Henry Aguda joined discussions on digital and crypto assets as the future of financial investments at the recently concluded PSE Investment Forum 2022.
As the country’s first bank to successfully carry out financial transactions through blockchain, UnionBank attests to the use of the technology in banking securely and efficiently. Blockchain can thus, be applied in a wide array of use cases.
“In fact, one of the very good applications we started with early on, was how to address the problem where rural banks don’t have access to one another; and to the basic banking requirements in the industry,” Aguda explained.
“We found a cheaper solution, and we gave this to the rural banks in the form of i2i, a platform that allows us to provide them a channel to interconnect with each other. And we wouldn’t have been able to do that if not for blockchain, specifically because of its low-cost operations and how easy it is to program,” he added.
Asked whether blockchain-based transactions are the future of banking and finance, Aguda agreed. “If you follow trends in history, we went from gold to paper, now it’s moving toward digital. So, if you go by that trend, everything is going to be digitized form of transactions. It’s no longer going to be a transfer of record of value, it will be a digital transfer of value.”
As to crypto being a viable investment, the UnionBank executive answered in the affirmative but expounded. “Yes, but subject to the following. First, keep it to the top 10 coins. Second, it shouldn’t be above five percent of your total investible portfolio, meaning it’s money that you can afford to lose. And third, do your own research,” Aguda said.
To conclude his talk, Aguda reminded the attendees: “First, on blockchain technology, it’s something that every company should explore. We’ve proven that it’s useful in terms of increasing efficiency in operations, and it’s easy to use. Second, as an investment instrument, (crypto or currency based on blockchain) it’s in the early stages. If you want to experiment and include it in your portfolio, it’s at your own risk. The regulation is still evolving, so treat it as a high-risk instrument and then explore,” Aguda said.
“Hopefully, venues like these where it is discussed, help the regulators form the right risk management framework and policies around it.”