{"id":6649,"date":"2021-01-29T01:26:22","date_gmt":"2021-01-29T06:26:22","guid":{"rendered":"https:\/\/cointelegraph.com\/magazine\/?p=6649"},"modified":"2021-05-21T09:46:22","modified_gmt":"2021-05-21T13:46:22","slug":"crypto-in-the-philippines-necessity-is-the-mother-of-adoption","status":"publish","type":"post","link":"https:\/\/cointelegraph.com\/magazine\/2021\/01\/29\/crypto-in-the-philippines-necessity-is-the-mother-of-adoption","title":{"rendered":"Crypto in the Philippines: Necessity is the mother of adoption"},"content":{"rendered":"

Binance\u2019s Changpeng Zhao describes the Philippines as “one of the most active crypto communities in Asia” and it’s the perfect way to sum up the country\u2019s blend of high adoption amid relatively low affluence.<\/strong><\/p>\n

With GDP spending power<\/a> of less than $10,000 per head each year, this nation of 7,100 islands is far from a major contributor to worldwide exchange volumes. But in terms of day to day use and enthusiasm, a significant proportion of Filipinos appear to be leapfrogging directly from a cash-based economy to the future of fintech.<\/strong><\/p>\n

The country boasts 17 licensed digital currency exchanges, and tens of thousands of pawn shops and convenience stores happily accept cash deposits and withdrawals for various crypto exchanges and apps. You can buy Bitcoin with cash at any of the 3,000 7\/Elevens in the land via Abra, and one in seven adults use the blockchain-based crypto and digital payments app Coins.ph. That\u2019s a level of market penetration comparable to some of the most well-known payments apps in the world.<\/p>\n

Crypto regulations are clearly defined and broadly favorable, and special economic zones such as the \u2018Crypto Valley of Asia’ in Cagayan, and the Clark Freeport Zone, compete to attract international blockchain projects. In fact, the International Monetary Fund named<\/a> the Philippines one of the ten best countries in the world in which to develop a blockchain or cryptocurrency project. Widespread high-level English language skills and relatively low wages have also seen Filipino workers become a favored choice as remote staff for blockchain projects.<\/p>\n

Swapping cash for crypto<\/h4>\n

The growing embrace of fintech and blockchain comes as much from a pressing need to modernize as anything else. It\u2019s still a cash-based society where 71% of adults don’t have a bank account. Even before the pandemic, one in five people lived below the poverty line, with many relying on cash in hand jobs and living from day to day.<\/p>\n

But with more active cell phone connections than people, there are big opportunities to change the game. By 2019, 10% of the population was already using<\/a> cryptocurrencies to make payments. Leah Callon-Butler, the director of Emfarsis Consulting in Clark, says fintech can dramatically change lives in the country:<\/p>\n

“People are just like, ‘Whoa, mind blown \u2014 this is going to save me half a day because I don’t have to go all the way to the bank during business hours and take three journeys on public transport and then wait in line for an hour and cash the damn thing and then go all the way home. I could do this on my phone.\u2019\u201d<\/p><\/blockquote>\n

Callon-Butler was herself unbanked when she arrived in the Philippines in 2018 to work with the local staff for an international crypto project. Like many, she turned to the blockchain based Coins.ph platform. “Coins.ph changed my life,” she says, adding: “I realized I could use it to deposit Bitcoin or Ethereum and I could buy mobile load, I could pay bills, transfer money to other people, it was just a lifesaver. It’s very easy to use and very customer centric.”<\/span><\/p>\n

Crypto makes life easier<\/h4>\n

In the past two years alone, Coins.ph claims to have <\/span>doubled<\/span><\/a> its user base to 10 million people, out of a total adult population of 72 million. Founded in 2014, it seeks to make digital transactions easy, with users able to sign up quickly with a mobile phone, email address and ID selfie and then withdraw or deposit cash at 33,000 retail partners. The app offers banking, bill payments, remittances and online shopping, all using either pesos or cryptocurrency.<\/span><\/p>\n

A spokesperson for the company told Magazine that more people had started using the platform since the beginning of the pandemic: “We\u2019re starting to see a positive shift as digital payments gain traction – a trend accelerated by the global pandemic,” they added: “More people are adapting to crypto, online banking and more.”<\/span><\/p>\n

Blockchain is also helping undercut the high cost of remittances. Around 10% of the GDP of the Philippines <\/span>comes<\/span><\/a> from the 10 million expatriate Filipinos who work overseas and send money back home to support their families. But wiring money via traditional routes comes with high fees \u2014 an average of 6.9% for a $200 transfer \u2014 leaving a big market opportunity for companies including PDAX, BloomX, SendFriend, Rebit and Coins.ph to transfer funds for a fraction of the cost using crypto, that can be withdrawn as cash at thousands of shops. The spokesperson says:<\/span><\/p>\n

“We\u2019re seeing growing interest amongst users in using crypto as a convenient option to transact \u2013 particularly cross-border. We see digital remittances \u2013 including blockchain-based remittance \u2013 as a significant opportunity. COVID-19 is a key driver of the growth we\u2019re seeing, but we expect this trend will continue beyond the pandemic.\u201d<\/span><\/p><\/blockquote>\n

Coins.ph would not provide a breakdown on the number of users who transact in cryptocurrencies, versus those who use fiat. But Mike Mislos, founder of the local Bitpinas crypto news website, estimates that it’s a significant proportion. “I’m also part of some groups on Facebook and like half the people are using it for normal financial transactions and half the people are also using it for cryptocurrencies,” he told Magazine.<\/span><\/p>\n

2023 goals you can bank on<\/h4>\n

The increase in user numbers at Coins.ph comes in the context of a wider drive to overhaul the economy. Realizing how inefficient the current cash-based, unbanked economy is, the Bangko Sentral ng Pilipinas has unveiled an ambitious roadmap with a goal for 2023 of getting 70% of citizens a bank account, and switching 50% of retail payments to digital.<\/span><\/p>\n