The Philippines is fast developing a reputation as a crypto-friendly nation. In May, UnionBank, one of the biggest banks announced it was connecting rural banks to the clearing system using blockchain technology in a project being jointly undertaken with Visa.
This week, the central bank approved another two exchanges to operate in the country bringing the total number to five so far. The newly licensed exchanges Virtual Currency Philippines and ETranss will have the authority to convert pesos to virtual currencies.
Unlike many countries which see cryptocurrencies as a threat to their economies, Philippines is going the opposite way. And it is for a reason.
There is clear evidence that cryptocurrencies are already reaching areas where banks have failed. Coins.ph, a crypto app, for example, has over five million users. The payments app and hot wallet is helping reinvigorate sections of the economy with short term loan facilities, mobile payments, bill settlements etc.
Remittances
Cryptocurrencies also promise to shake up remittances, an important part of the Filipino economy which accounts for almost 10% of its GDP.
According to Bangko Sentral ng Pilipinas (BSP) total personal remittances hit a total of $31.29 billion in 2017 alone, an increase of more than 5% from the previous year. It takes anything between 3-5 days to transfer money across borders. With cryptocurrencies like bitcoin and bitcoin cash, it takes only a few minutes or even seconds.
In addition to the speed, low fees could also help increase the volume of transactions and help spur local economies.
The Cagayan Economic Zone Authority (CEZA) which manages a special economic zone in the northern part of the country has, even more, crypto friendly regulations and policies.
Special Economic Zone
Legislators allowed cryptocurrency exchanges to operate in the zone in February and the first ten were registered in April within CEZA, a number that is set to go up. The businesses must, however, spend at $1 million within two years and pay $100,000 in license fees.
According to Reuters, the regulator is even planning to set up a blockchain university to supply the workers needed in the new industry.
The Philippines is one of the few countries in Asia to embrace cryptocurrencies in 2017. Japan and South Korea recognize cryptocurrencies although they impose certain restrictions.
One thing is clear; authorities in the Philippines are seeing an opportunity with cryptocurrencies where others are seeing a threat.