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- Bitcoin provides an alternative financial system for the unbanked and underbanked population, allowing them to participate in the global economy and access financial services.
- The adoption of Bitcoin in the country is driven by factors such as remittances, online freelancing, and investment opportunities.
- Meanwhile, the regulation of cryptocurrencies in the Philippines is still in progress, with discussions on legislation and frameworks by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC).
Bitcoin adoption in the Philippines has been steadily growing over the years. Since the crypto bull run in 2021, the local adoption of cryptocurrency in the country has been rapid compared to the other countries surveyed by the blockchain data platform Chainalysis for its annual index report titled, “The 2022 Global Crypto Adoption Index,” where the Philippines ranked 2nd.
Welcome to the Bitcoin Month Series on BitPinas, where we discuss everything Bitcoin. Please check out the other articles:
- Bitcoin Month: Origins and Key Milestones in Bitcoin’s History
- Bitcoin Pizza Day: The Story Behind the First-Ever Real-World BTC Transaction
- How to Buy and Store Bitcoin: A Step-by-Step Guide
- Bitcoin and the Lightning Network: An Introduction to Scalability Solutions
- Bitcoin in the Philippines: Adoption, Regulation, and Use Cases
With the emergence of Bitcoin and other cryptocurrencies, the country’s large population of tech-savvy individuals—who are unbanked or underbanked—had another way of being financially capable. Cryptocurrencies provide an alternative financial system, enabling Filipinos to participate in the global economy and access financial services.
Bitcoin presents a more efficient and cost-effective alternative, enabling OFWs to transfer funds to their loved ones in the Philippines with greater speed and affordability.
With several online retailers and service providers now accepting Bitcoin as a payment method, customers can now use the leading crypto to make purchases, providing them with an alternative way to utilize their cryptocurrency for online transactions.
- Freelancing and Outsourcing
Bitcoin offers freelancers and service providers a convenient way to receive payments from international clients without the need for intermediaries or high transaction fees.
- Investment and Trading
Since Bitcoin is the leading cryptocurrency, many view it as a speculative investment or a long-term store of value.
- Financial Inclusion
Bitcoin plays a significant role in promoting financial inclusion in the Philippines, specifically benefiting the unbanked and underbanked population. Through cryptocurrency wallets and exchanges, individuals gain access to essential financial services, enabling them to store value, engage in transactions, and actively participate in the digital economy, even in the absence of traditional bank accounts.
- Cross-Border Transactions
Bitcoin’s decentralized nature and borderless transactions make it well-suited for cross-border payments and international transactions. It eliminates the need for intermediaries, reduces fees, and expedites the transfer process.
- Donations and Charitable Contributions
Bitcoin has been utilized for charitable purposes in the Philippines. Non-profit organizations and individuals have started accepting Bitcoin donations, enabling the transparent and efficient transfers of funds for various causes.
Read the Crypto Donations Series presented by BitPinas:
- DIGITAL BAYANIHAN: Cryptocurrency Revolutionizing Donations
- Pros and Cons of Crypto Donations
- List of NGOs, Foundations, and Charities that Accept Crypto Donations
The country has seen an increase in the use and acceptance of Bitcoin for various purposes. Its adoption in the Philippines has been driven by various factors, including remittances, online freelancing, and investment opportunities. Some of the use-cases of it that could further promote adoption in the country include:
Globally, the Philippines is known for its large population of overseas Filipino workers (OFWs) who send money back home. Remittances are also a significant economic asset, contributing 8.9% of the country’s gross domestic product (GDP). With the expensive charges of traditional remittance services, Bitcoin has emerged as a popular alternative due to its faster transactions and lower fees.
During a community meetup, Binance to the Philippines General Manager Kenneth Stern suggested that blockchain technology and cryptocurrency could revolutionize remittance services, proposing the use of cryptocurrencies and blockchain technology for their advantages of speed, direct peer-to-peer transfers, and low fees. Stern also emphasized that digital wallets and cryptocurrencies can greatly benefit the Filipino people by promoting financial inclusion and offering access to world-class financial products.
Strike, a remittance service utilizing Bitcoin’s Lightning Network, has expanded its operations to the Philippines by partnering with Bitcoin payments firm Pouch.ph to convert BTC into local fiat and facilitate transfers to recipients’ bank or mobile money accounts. The company aims to offer faster and cheaper international payments compared to traditional methods by leveraging the Lightning Network on the Bitcoin blockchain.
Bitcoin has gained popularity as an investment asset in the Philippines. Many Filipinos view Bitcoin as a store of value and a hedge against inflation. Local cryptocurrency exchanges provide platforms for buying and selling Bitcoin, allowing individuals to invest in the cryptocurrency market.
- Online Freelancing
Especially during the pandemic, the Philippines had a thriving freelance industry, with many Filipinos working remotely for international clients. Aside from e-payments, Bitcoin has become a preferred method of payment for freelancers. This mode of payment has been especially essential for those receiving payments from clients outside the country, as it offers faster and cheaper cross-border transactions compared to traditional payment methods.
- Financial Inclusion
With the large population of the country still unbanked due to limited access to traditional banking services, Bitcoin has played a role in expanding financial inclusion in the Philippines. Cryptocurrencies provide an alternative means for individuals to store value, make transactions, and access financial services without relying on traditional banks.
Boracay Island, one of the top tourist spots in the Philippines, is currently dubbed as a “Bitcoin Island” through the efforts of Pouch.ph, which has been actively promoting the use of Bitcoin on the island. (Read more: I Got a Haircut in Boracay and Paid With Bitcoin)
- Blockchain and Cryptocurrency Startups
The Philippines has shown interest in promoting blockchain technology and fostering a supportive environment for cryptocurrency startups. Initiatives like the “Crypto Valley of Asia” in the Cagayan Economic Zone have aimed to attract blockchain and cryptocurrency businesses, contributing to the growth of the industry in the country.
Last March, the first-ever Bitcoin Island Retreat commenced at the Henann Regency Resort and Spa in Boracay Island, Aklan, Philippines. It was attended by speakers across multiple industries and crypto-business sectors, including the former Solicitor General and Current Dean of Silliman University College of Law, Florin Hilbay.
Recently, mobile money and crypto wallet Maya has expanded its services by allowing users to convert specific cryptocurrencies to Bitcoin directly within the app.
- Awareness and Education
Bitcoin awareness and education efforts have increased in the Philippines. Local communities, organizations, and online platforms offer resources and educational events to help individuals understand Bitcoin, blockchain technology, and cryptocurrency investing. (Read more: List of Web3 Educational Platforms to Help Filipinos Get Started in Crypto and Blockchain)
In his lecture at the University of the Philippines, Hilbay encouraged understanding Bitcoin’s complexity, highlighting its immunity to inflation and potential as a global reserve asset. He also differentiated between the fiat system and the Bitcoin system, describing the latter as a permissionless, separate monetary system.
Hilbay also expressed his bullish stance on Bitcoin, calling it “the only real money for the 21st century” during the Bitcoin Island Retreat. Prior to these, he launched a book on The Bitcoin Monetary Network.
Cryptocurrency in general is still not properly regulated in the country, as there are still no definite laws addressing this industry.
Recently, Atty. Rafael Padilla, the co-founder and trustee of BlockDevs Asia, professor of law at San Beda Alabang, and author of Fintech: Law and First Principles, published a paper in BitPinas, discussing how private ordering can lead to the organic integration of environmental, social, and governance (ESG) principles as a uniform commercial practice or lex mercatoria among bitcoin miners.
As early as 2021, the Bangko Sentral ng Pilipinas (BSP) and Securities and Exchange Commission (SEC) expressed that regulation of cryptocurrencies is different from encouraging people to adapt.
- Securities and Exchange Commission
Last March, SEC Commissioner Kelvin Lee revealed that the Commission had already created a regulatory framework for cryptocurrencies in order to offer more protection and security to investors in the Philippines; however, it was postponed due to the FTX collapse. Currently, the draft has not been released to the public.
On January 19, the SEC-PhiliFintech Innovation Office announced its partnership with the UP Law Center (UPLC) through the UP Legal Center Research Program through a memorandum of understanding.
- Bangko Sentral ng Pilipinas
Last year, the central bank urged the Senate to draft legislation that specifically addresses digital assets, including cryptocurrencies and non-fungible tokens (NFTs), in order to safeguard consumers. During a meeting with the Senate Committee on Banks, Financial Institutions, and Currencies and representatives from FintechAlliance.Ph, Binance, and the Cagayan Economic Zone Authority (CEZA), the BSP discussed the Digital Assets Act (Senate Bill 184) and Senate Resolution 126 concerning cryptocurrencies and digital assets.
Currently, the BSP keeps tabs on virtual asset service providers (VASPs) to ensure that users are only dealing with licensed and regulated entities. (Read more: List of Philippine Financial Institutions Both VASP and EMI Licenses)
This article is published on BitPinas: Bitcoin in the Philippines: Adoption, Regulation, and Use Cases
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.