UnionBank of the Philippines to launch crypto services

UnionBank of the Philippines, the tenth largest bank in the country by assets, plans to launch crypto trading and custodial services. It has not shared a specific timeline, per Bloomberg.

With over USD 15 billion of assets under management, UnionBank is set to tap Swiss startup Metaco’s digital asset custody solution to manage the bank’s crypto assets, according to an announcement published by Metaco on Thursday.

Metaco’s custody solution , named Harmonize, enables large financial institutions to integrate crypto custody, trading, tokenization, and smart contract management into financial institutions’ core infrastructure.

UnionBank is one of the first financial institutions in the country to adopt cryptocurrency. Owned by local conglomerate Aboitiz, the bank was the first local lender to release its own stablecoin in 2019, named PHX, which gives rural banks easier access to remittance and payments.

In the same year, the bank launched crypto ATMs that allow its account holders with crypto wallets to withdraw cash that is converted from crypto as well as trade on the spot, per a local media report.

Major financial institutions race to cater to surging demand

UnionBank’s latest development comes at a time when local banks across Southeast Asia are rapidly adding crypto-related services, often by investing in licensed crypto exchanges. This phenomenon is particularly common in Thailand and Singapore. Thailand’s oldest bank, Siam Commercial Bank, acquired 51% of the country’s largest crypto exchange, Bitkub, for THB 17.85 billion (USD 535 million) in early November 2021, bringing the firm’s valuation to THB 35 billion (USD 1 billion).

Three months earlier, digital asset exchange Zipmex landed USD 41 million in a Series B round led by Krungsri Finnovate, the venture capital unit of the Bank of Ayudhya, Thailand’s fifth largest bank in terms of assets, loans, and deposits.

Local financial institutions are building their own crypto ventures such as crypto bourses, initial coin offering (ICO) platforms, and NFT marketplaces. Also, VCs are investing in early-stage blockchain projects.

Kubix Digital Asset, or simply Kubix, is a subsidiary of Thailand’s Kasikornbank that commenced operations on January 13, after receiving an initial coin offering (ICO) portal license from the Securities and Exchange Commission (SEC) the day before, per the Bangkok Post.

Token X is another player backed by Siam Commercial Bank that is awaiting license approval, which cites anonymous sources from the SEC.

In Singapore, the city-state’s central bank also granted official approval to DBS Vickers, the brokerage arm of DBS Bank, to provide digital payment token services in the city-state in early October. OCBC Bank is also mulling setting up a crypto exchange soon, according to The Business Times.

Regulators set new, tighter rules

But the rapid acquisition and trading of crypto in Southeast Asia has drawn scrutiny from monetary authorities and other governmental entities. On January 17, Singapore’s central bank said that licensed exchanges, also known as digital payment token (DPT) service providers, can no longer advertise and market their services to the general public in Singapore.

“MAS (Monetary Authority of Singapore) has consistently warned that trading DPTs is highly risky and not suitable for the general public, as the prices of DPTs are subject to sharp speculative swings,” the regulator said in an announcement.

“MAS has observed that some DPT service providers have been actively promoting their services through online and physical advertisements or through the provision of physical automated teller machines (ATMs) in public areas. This could encourage consumers to trade DPTs on impulse, without fully understanding the attendant risks,” the announcement read.

Thailand’s Revenue Department is set to finalize rules for crypto capital gains tax on January 20, with details on tax collection and rates being published later this month, per the Bangkok Post. The Finance Ministry proposed a 15% capital tax on crypto profits for both traders and investors. But stakeholders commented that tax calculations, collection methods, and payment methods remain unclear.