March 5, 2020 – On the week of June 27, 2015, a total of 593 bitcoin traded on peer-to-peer Bitcoin site LocalBitcoins.com in the Philippines. This amounts to around Php 6.7 million at that time.
Just last week February 29, 2020, 8 bitcoin traded on the peer-to-peer exchange worth Php 3.7 million. While the peso volume is higher, both Bitcoin and Php trading volumes are showing a significant decline.
But what is causing this decline?
Globally, LocalBitcoins’ trading volumes are on decline amidst a more regulatory climate for cryptocurrencies in 2019, not to mention the drop from Bitcoin’s all-time high of nearly US$20,000. Analysts look at LocalBitcoin’s enforcement of enhanced KYC rules as another factor. Its trading volume fell by 30% immediately after the new KYC launch. Because it is registered in Finland, and Finland being a member of the Financial Action Task Force (FATF), which recently announced “recommendations” to combat money laundering in the cryptocurrency space, it is likely another reason why new KYC procedures are enforced. Or perhaps they are expecting such regulations to occur that’s why they announced the new KYC procedures.
There were allegations that LocalBitcoins is suspending users because of this more enhanced due diligence process.
Apart from a better regulatory climate, another factor is possibly the increase of legitimate cryptocurrency exchanges that users can trade their cryptocurrencies. Atleast in the Philippines, there is a significant increase in the number of licensed cryptocurrency exchanges compared to 6 or 7 years ago. Furthermore, the presence of other peer-to-peer exchanges like Paxful likely contributed to the decline in trading volume in the country. Paxful launched their marketing activities in the Philippines in Q4 2019.
Paxful data on CoinDance, both for PHP and BTC trading volumes have increased although the increase is still below that of LocalBitcoins’. For example, during the week of February 29, 2020, Paxful traded 6 bitcoin, a record high for the exchange. On that same week, LocalBitcoins traded 8 bitcoin, one of, if not the lowest traded volume for that exchange.
While we wait for an update data from the Bangko Sentral ng Pilipinas regarding the transaction volume of the licensed virtual currency exchanges, we can rely on the data from Paxful and LocalBitcoins as reported on CoinDance for now to paint a picture on the trend in Bitcoin traded volume in the Philippines.
This article is published on BitPinas: Philippines Bitcoin Volume on LocalBitcoins at Weekly Lows in Contrast, Paxful Sees Uptrend