UnionBank 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 is likely to hold 3 to 5 percent of their personal assets in digital assets like bitcoin in five years assuming markets are “stable,” up from about 1 to 2 percent now, said Cathy Casas, head of the bank’s blockchain and application programming interface group.
Many crypto investors are young people, some of whom earn tokens from play-to-earn virtual games, she said.
Photo: Reuters
“It’s a way to future-proof our banking business,” Casas said in an interview.
About 5 percent of the local population have dabbled in cryptocurrencies, Casas estimated. That is in line with the global average, according to an estimate from Binance Holdings Ltd (幣安), 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, such as 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.
“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 cover tokenized bonds, which it is already helping clients issue, 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, a statement from Metaco said yesterday.
Separately, Crypto.com has not received any “outreach” from regulators following a cybersecurity breach earlier this week of about 400 customer accounts, chief executive Kris Marszalek said.
During an online interview at Bloomberg’s Year Ahead virtual conference, Marszalek said from Singapore that he is prepared to share information on the hack if any relevant inquiries come from regulators.
The company became the latest crypto exchange to be hit by online thieves on Tuesday after users reported that ethereum and other cryptocurrencies were wiped from their accounts.
All customers have been reimbursed, Marszalek said.
“Obviously, it’s great lesson and we are continuously strengthening our infrastructure,” he said during the interview. “Given the scale of the business, these numbers are not particularly material and customer funds were not at risk.”
An exact value of cryptocurrencies affected is still unknown, although estimates are in the millions.
Marszalek said Crypto.com plans to release more information in a blog post in the coming days. System hacks have been a persistent problem since the earliest days of cryptocurrencies, with rouge programmers probing the software code of protocols for vulnerabilities.
The firm, which moved its headquarters from Hong Kong to Singapore last year, is awaiting license approval from the Monetary Authority of Singapore.
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