The Philippines is poised to make a huge impact on the Bitcoin industry in 2016 - here’s why.
Unless you’ve been living under a rock, you have probably heard of Bitcoin - the popular, and sometimes infamous, open-access, global digital currency that created an entirely new class of technology called Blockchain technology and cryptocurrency.
Many experts say it has the potential to reshape finance, governance, and economics the way the internet reshaped telecommunication, media, and information exchange. They say the world will never be the same once this technology achieves its full potential. Bitcoin is not just the money of the Internet; it is the Internet of money.
It’s easy to get caught up in all this hype, but what about practical applications? Is Bitcoin actually useful in the real world today?
We here at Satoshi Citadel Industries, along with other local startups, have been using Bitcoin Blockchain technology in practical applications for the last two years. We’ve been busy building an ecosystem, piggy-backing existing financial tools and infrastructure to build a sustainable business. We’ve been building an entirely new industry, and more importantly, a new community,creating several dozen new jobs and new opportunities.
We provide blockchain-powered services that cater to thousands of people both locally and globally. The scope and speed of the bitcoin services here can be considered as impressive compared to more developed countries. We believe that the Philippines will be one of the first places where Bitcoin first makes an impact that will be felt by the entire industry - the perfect present use-case for a technology deemed ahead of its time.
The Philippines is the perfect storm for Bitcoin, a country whose largest export is manpower. With more than ten million Filipinos working abroad and sending money home to the tune of $27 Billion annually, a whopping 10% of its GDP, money transfer is a part of everyday life. They pay an average of 5.5% in fees, but this is skewed because it includes larger remittances. People who want to send home smaller amounts have their luck cut out and have to pay more. Bitcoin technology can change this dramatically, if implemented correctly.
So what is the landscape like for Bitcoin in the Philippines right now? Here’s what you can do with it here so far:
Buy bitcoins online by paying through practically any bank (walk-in deposit or online) or pay-in center (Dragonpay) and receive it within a few hours. There is also a robust Localbitcoins.com market with large volumes.
Buy bitcoins using mobile credits, as well as buy mobile credits with bitcoins.
Buy prepaid bitcoin scratch-off cards over the counter, or online using mobile phone credits via Smart Gamex.
Freely exchange Bitcoins to Philippine pesos and vice versa, in real time, using mobile apps available for Android or iOS.
Sell bitcoins for Pesos online and receive the money directly into your bank account or pick it up from literally anywhere in the country in a matter of hours. No matter how remote, you are never going to be too far to receive your money.
Sell your bitcoins at select ATM machines in Manila and get Pesos without needing a bank card.
Send fiat money from anywhere in the world to anyone in the Philippines using Bitcoin via a web/mobile app, and contrary to what some self-proclaimed experts say, it can and will likely be cheaper than the usual popular channels. This is no easy feat to pull off considering that:
The Philippines is an archipelago of 7,107 islands with 100+ million people.
Over 20 million live in a concentrated area in and around the capital of Metro Manila - most are there to work and send money back home to their families in the province.
Majority, meaning more than 70%, do not have bank accounts. Online banking is practically non-existent except to a small percentage of the population.
When you can send fiat money to anyone using Bitcoin, it also means you can do these things:
Pay any recurring bills with Bitcoin (utilities, credit cards, mortgage payments, and rent) all within 24-48 hours.
Pay for goods and services directly into merchant bank accounts - which means you can do B2B payments with Bitcoin.
As a merchant or service provider, you can also participate in the bitcoin economy without any of the risks involved by using existing services. This allows merchants, both online and brick-and-mortar, to:
Accept bitcoin payments and then receive the Pesos directly in their bank accounts the next business day.
Be able to accept bitcoin payments even without an internet connection via TxtPay or Boom.cash.
Accept bitcoin payments even with just an informal business on social media or a website.
When we ask a merchant to start accepting Bitcoin, the reality is that they are always either uninterested or even fearful, thinking they need to hold on to the bitcoins and exchange it to fiat themselves. The existing local service that caters to merchants here today eliminates this by doing what others like Bitpay and Coinbase have done, putting Philippine Pesos into the merchant’s bank account (or via cash delivery) the day after they receive the payment.
The price of Bitcoin here is very competitive because there are at least three startups that are competing for the lion’s share of the market. The Rebittance business alone provides the local market with a steady stream of thousands of bitcoins every week, so much so that the trading volumes of these startups are comparable to some of the big exchanges in the world.
And last but not the least, the potential regulatory environment is a positive one. Bitcoin companies actively police themselves, are self-regulating, and has so far maintained a harmonious yet competitive landscape.
The Central Bank of the Philippines, arguably the most progressive government agency in the country, communicates with the Bitcoin Organization of the Philippines, a non-profit and SEC registered organization consisting of businesses and individuals alike, and have been actively discussing how Bitcoin technology can contribute on a socio-economic scale, specifically to financial inclusion and the remittance industry.
There is a strong desire to do the right thing from both the industry and the government bodies involved, which is not surprising given that a company like Uber, for example, is now a regulated and legal entity in the Philippines, a first in the world.
What’s missing?
With all this growth and development, the Philippine Bitcoin industry still lacks mature infrastructure that would complete the ecosystem.
A local order book exchange with liquidity.
This is probably the most important one of them all.
More diverse bitcoin services and products
The biggest startups are almost direct competitors.
More decentralized applications
Most of the Bitcoin services and products are centralized apps.
Mainstream awareness
If you ask a random person in Manila about Bitcoin, chances are they have never even heard of Bitcoin. Compared to, say, North America, we are at least 1-2 years behind.
These key elements may be missing, but that is not to say that no one is doing anything about it. There are developers and entrepreneurs working on them as we speak. It is only a matter of time before they are fully developed and operating on a competitive level.
We survived 2014 and thrived in 2015, so we expect that 2016 is going to be a very big year for the Bitcoin industry in the Philippines. More explosive growth in terms of bitcoin volume, more services and products using Bitcoin and the Blockchain, new startups to join the competitive landscape, clear regulatory guidance from the government agencies involved, and most importantly, the beginnings of real mainstream acceptance.
