Union Bank of the Philippines (UnionBank) has etched its name in history by obtaining a Certificate of Authority from the Bangko Sentral ng Pilipinas (BSP) to operate as a Virtual Asset Service Provider (VASP). This momentous achievement positions UnionBank as the first and sole universal bank in the Philippines authorized to offer virtual asset exchange services. The official presentation of the license took place last 27 September 2023 at UnionBank Plaza in Pasig City.
The VASP license signifies a strategic advancement for UnionBank, unlocking doors to new markets and opportunities. It empowers the bank to explore innovative solutions that cater to the evolving needs of its clients and ensures its continued leadership in the digital financial landscape. This move aligns with UnionBank’s commitment to innovation, regulatory compliance, and customer-centricity, making the bank well-prepared for the future.
“This is a testament to the pioneering effort of the [Emerging Technology] team and the spirit of innovation by UnionBank. Strategically, this will pay off in the next coming years especially when a lot of investors are going into blockchain and tokenization,” according to UnionDigital Bank President and CEO Henry Aguda during the ceremony.
Central to UnionBank’s strategy for future-proofing is the adoption of blockchain technology, with a focus on potential use cases such as cryptocurrencies. The bank’s proactive approach was evident in 2019 when it introduced the country’s first bank-operated, two-way virtual currency ATM at “The ARK,” its digital branch in Makati City, enabling users to buy and sell cryptocurrencies.
Utilizing insights from the virtual asset ecosystem, UnionBank is poised to explore additional applications of blockchain technology beyond virtual assets. Possibilities include tokenized collaterals, tokenized deposits, and the integration of tokenization in trade finance and supply chain financing. This strategic move aims to revolutionize traditional banking processes, enhancing efficiency, transparency, and accessibility.
The VASP license not only reinforces UnionBank’s commitment to innovation but also underscores its dedication to customer-centricity. By expanding its offerings through the license, the bank aims to provide clients with more comprehensive financial experiences. This encompasses a broader range of financial services powered by blockchain, including lending, cross-border payments, and other smart contract-based products.
“This is a call for laser focus on the target only we see, and through the twists and turns and ups and downs of these avenues, we shall persist and persevere with our one North Star, which is to elevate lives and fulfill dreams,” said UnionBank Vice Chairman Dr. Justo A. Ortiz.
Beyond its immediate impact, the VASP license positions UnionBank as a responsible player in the digital finance ecosystem. The bank’s emphasis on surveillance and compliance is not merely a regulatory requirement but a proactive measure to maintain client trust and industry integrity. UnionBank’s dedication to adhering to regulatory standards and collaborating with the BSP sets an example for others in shaping the future of digital finance in the Philippines.
“This achievement underscores the importance of doing something that’s never been done before, not being reckless, and most of all, daring to be bold, not being afraid to go there,” said UnionBank Executive Vice President and Chief Technology and Operations Officer Dennis Omila highlighting that the Bank’s obtaining a license is relevant for the entire banking industry.
This milestone aligns seamlessly with UnionBank’s “Tech-Up Pilipinas” advocacy, which seeks to advance digital literacy, enhance financial inclusion, and promote technological empowerment among Filipinos. Through collaborative initiatives and partnerships, UnionBank continues to redefine the standards of banking in the digital age, contributing to progress for a brighter future.