Use of blockchain, crypto in PHL may grow further
The adoption of blockchain technology and cryptocurrency is likely to continue to grow in the Philippines as people explore more of its uses in the financial infrastructure.
Philippine-led blockchain startup Tetrix said in an interview with The business world that ownership of digital assets may increase as people become more educated about these technologies.
“The crypto ecosystem has grown so much in recent years and there is a greater demand to build high-performance applications such as games, NFT (nonfungible token) marketplaces and media apps on cost-effective blockchains,” said Tetrix CEO Emman Navalan.
“However, the limitations between blockchains force users to choose one over the other. Tetrix aims to bridge this gap. Tetrix creates a way for many different blockchain networks to seamlessly communicate with each other,” he added.
Blockchain, the technology behind the trading of cryptocurrencies and NFTs, is a distributed database that exists on multiple connected computers.
Often referred to as a distributed ledger, blockchain also allows for digital ownership and peer-to-peer transactions.
Mr. Navalan said blockchain can support any development or digital transformation by eliminating redundancies, making processes efficient. It can be used in accounting, financial services, logistics and art as it helps keep relevant information secure.
“Potential applications for blockchain are limitless, from storing customer identities to handling cross-border payments, clearing and settling bond or stock trades to smart contracts that are self-executing, such as a credit derivative that pays out automatically if a company goes bankrupt or a bond that regularly pays interest to the holder,” he said.
Established in 2020, Tetrix aims to change the way blockchains are designed, used and developed for the digital space.
By using the omni chain interoperability protocol, Tetrix has helped enterprises and developers implement interchain applications without having to rely on a middleware approach, Mr. Navalan said.
The blockchain startup recently launched Pitaka, a crypto wallet built on top of Tetrix that can transact with multiple networks.
Tetrix also wants to connect with other blockchain networks and support a number of digital projects such as the Central Bank Digital Currency (CBDC) project of the Bangko Sentral ng Pilipinas (BSP).
The BSP has been working on a pilot project to test the use of wholesale CBDCs for large financial transactions among selected institutions. It wants to focus on the wholesale aspect of CBDCs as it expects this to have a greater impact compared to retail use cases.
The project covers areas including political and regulatory considerations, technological infrastructure, governance and organizational requirements, legal matters, payment and settlement models, reconciliation procedures and risk management.
The BSP recently said it is on track to conduct a pilot test of its CBDC project by the fourth quarter.
Mr. Navalan said CBDC can provide the central bank with easy access to digital solutions. It can also facilitate faster cross-border transactions as users can send digital versions of fiat money directly.
However, he raised some concerns about the project and urged the BSP to be more specific and clarify restrictions on CBDC use.
“Can it be used by someone as a regular peso? What are the certain limitations? Would you allow them to really do it in all industries? These are the things that are being questioned in Europe, especially in Britain,” Navalan said.
– We must have clarity. The government should support the idea of not only cryptocurrencies, but Web3 in general. Because what drives cryptocurrency is actually the technology that comes with it because the technology allows for trust, he added.
Web3 refers to decentralized web and includes both decentralized applications and decentralized economy. Web3 also includes cryptocurrencies, assets or tokens.
“Without the technology, cryptocurrency will just trade, send assets and nothing more to it. That’s something we don’t want to go forward with, because it will mean you have less adoption, less collection, and everything is going to be inefficient,” added Navalan to. — Keisha B. Ta-asan
