THE adoption of blockchain technology and cryptocurrency is likely to continue growing in the Philippines as people explore more of its use in the financial infrastructure.
Filipino-led blockchain startup Tetrix said in an interview with BusinessWorld that ownership of digital assets may increase as people become more educated about these technologies.
“The crypto ecosystem has grown so much over the past years and there’s a greater demand for building high-throughput applications like gaming, NFT (nonfungible token) marketplaces, and media apps on cost-effective blockchains,” Tetrix Chief Executive Officer Emman Navalan said.
“However, the limitations between blockchains are forcing users to pick which one to use over the other. Tetrix aims to bridge that 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 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 arts, as it helps in keeping relevant information secure.
“Potential applications of blockchain are limitless, ranging from storing client identities to handling cross-border payments, clearing and settling bond or equity trades to smart contracts that are self-executing, such as a credit derivative that pays out automatically if a company goes bust or a bond that regularly pays interest to the holder,” he said.
Established in 2020, Tetrix aims to change the way blockchains are designed, utilized, and developed for the digital space.
Using the omni chain interoperability protocol, Tetrix has been helping businesses and developers to 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 is also looking to connect to other blockchain networks and support numerous 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-value financial transactions among selected institutions. It wants to focus on the wholesale aspect of CBDCs as it expects this to have a bigger impact compared to retail use cases.
The project covers areas including policy 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 for its CBDC project by the fourth quarter.
Mr. Navalan said CBDCs can provide the central bank easy access to digital solutions. It can also facilitate faster cross-border transactions as users can directly send digital versions of fiat money.
However, he raised some concerns about the project and urged the BSP to be more specific and clarify limitations for CBDC use.
“Can it be used by anybody like a regular peso? What are the certain limitations? Would you allow them to really transact that in all industries? These are the things that are being questioned in Europe, especially in the United Kingdom,” Mr. Navalan said.
“We have to have clarity. The government should support the idea of not just cryptocurrencies, but Web3 in general. Because what drives cryptocurrency is actually the technology that comes with it because the technology allows trust,” he added.
Web3 refers to the decentralized web and includes both decentralized applications and decentralized finance. Web3 also includes cryptocurrencies, assets, or tokens.
“Without the technology, cryptocurrency will just be trading, sending assets, and nothing more to that. That is something we wouldn’t want to be in moving forward because that would mean you have less adoption, less collection, and everything is going to be inefficient,” Mr. Navalan added. — Keisha B. Ta-asan