The times we’re living in are probably one of the most exciting periods we may witness—ever. And we’re pretty sure we’re not going out on a limb with such a statement.
Just look around you and you’ll see a lot of new things, thanks to cutting-edge technologies that drive innovations and make you look forward to the future with even greater anticipation.
Take cryptocurrency, for example. By using the blockchain technology, cryptocurrencies are able to offer an alternative way to how people bank, pay for goods and services, or invest, among other financial transactions.
Indeed, the crypto industry is showing a lot of promise for global financial markets, including the Philippines.
The Philippines as the Center of Crypto in Asia
At present, cryptocurrency has taken different parts of the world by storm. Countries like Japan, Australia, and Canada, are already actively using cryptocurrencies as a legal tender in their financial and economic systems.
Not too far behind is the Philippines, which has launched its own initiatives to make virtual currencies more mainstream. This isn’t really surprising, considering that the financial sector of the Philippines is resilient and receptive toward global economic trends or events.
In fact, the Philippines was one of the few countries belonging to the Association of Southeast Nations (ASEAN) that wasn’t severely affected by the 1997 Asian financial crisis.
Although this financial meltdown caused a ripple effect in neighboring countries, the Philippines was spared a great deal, as its central bank, the Bangko Sentral ng Pilipinas (BSP), efficiently handled the crisis.
This only shows that the Philippines is a country that’s not reluctant to implement sound financial policies and be on par with its economic counterparts—or even outdo them.
In this post, we look into the main reasons how the Philippines can potentially break records anew by being a “crypto power” in Asia—and what this means for your crypto assets.
The Fastest Rising Crypto Hub
At the moment, the crypto industry in the Philippines is in the developing stages—meaning there are already efforts to institutionalize partial to full-scale adoption of cryptocurrencies and the technologies behind them.
Although there are still challenges to overcome, these barriers can easily be offset by what the Philippines has to offer crypto users and communities.
Here are the most notable reasons why we think the future of crypto is heading toward the fastest rising crypto hub—the Philippines.
Reason #1—The need for a new banking system
Despite available technologies, Filipinos haven’t been using banking services to the hilt. What this means is that virtual currencies have an opportunity to break new ground by being a more accessible and reliable mode of payment for the country’s 70% unbanked population.
Statistics from the banking sector reveal that 7 in 10 Filipinos don’t have a bank account. A couple of issues seem to make the average Juan dela Cruz (a term used to identify a typical Filipino) steer clear of the banking system.
For one, traditional banks require that you present documents to qualify as a client. Then aside from paying upfront fees associated with opening an account, you might find monthly service charges in your bank statement if there’s not enough money in your account.
Meanwhile, online banking has its own share of negative impressions, such as an unsecure system with a slew of fees that may discourage Filipinos from using the technology.
Altogether, these challenges are pushing Filipinos to be rather cynical about banking.
In contrast, you don’t have to secure anybody’s permission to join a crypto exchange or network, and neither should you worry about your assets being exploited since it’s easy to see all the transactions within the blockchain.
Reason #2—Lenient regulations by the Central Bank
In February 2017, the BSP or the Central Bank of the Philippines issued Circular No. 944 to lay down the guidelines for virtual currency exchanges. This is a very significant move since there is now a regulatory framework for users, exchanges, and companies that make up the crypto industry.
Through the circular, the BSP recognized that crypto exchanges “have the potential to revolutionize delivery of financial services, particularly for payments and remittance, in view of their ability to provide faster and more economical transfer of funds.”
The circular also set forth a reasonable number of requirements that crypto exchanges must comply with. This is to ensure that the interests of Filipino crypto consumers will be protected, and at the same time, it reduces the risk for the Philippines to be used as a channel for illegal activities.
Reason #3—Stellar track record of the economy
As what the 1997 Asian financial crisis showed, the Philippines has the ability to keep its economy afloat—or bullish even—just like those of the world’s major players.
It’s worth noting that the country has also been through a series of crises—from economic decline in the 70s to political instability in the 80s. Yet the Central Bank has been prudent in adopting policies and reforms so that the country can recover quickly—or avoid taking a hit to begin with.
World Bank Director for Brunei, Malaysia, Philippines and Thailand Mara K. Warwick says, “Higher private consumption due to lower inflation, steady growth of remittances, [ …] will fuel growth this year.”
Indeed, we’re in an era where cryptocurrencies provide a way for overseas Filipino workers (OFWs) to send money remittances back home, improving the country’s overall economic performance.
The birth of the crypto industry couldn’t have come at a more opportune time, too. Aside from the government, key industries in the private sector like retail, real estate, tourism, and many other businesses are finding more and more opportunities for their customers to use crypto as a major payment method. Ultimately, this will pave way for you to enjoy high-quality products and services from your favorite crypto companies.
Reason #4—The establishment of the “Crypto Valley of Asia”
Another indicator that the Philippines is on its way to becoming a melting pot of financial technologies, such as cryptocurrency, is the presence of economic zones.
Particularly, the Cagayan Economic Zone Authority (CEZA) envisions to be the Crypto Valley of Asia as it looks to gather fintech firms from the region. Our post on crypto hotspots discusses the importance of having an environment that’s dedicated to growing the virtual currency ecosystem.
This is why just like other special ecozones, the CEZA is replete with world-class facilities and tax exemptions, among other benefits—all of which are designed to bring foreign investments into the country. Then as they become competitive in their business, they’ll be in a better position not only to improve their offerings but also make their prices more affordable to users.
Reason #5—Rising use of mobile phones and other smart technologies
Did you know that the Philippines now sits at the top of the world’s most active users of internet technologies? According to the news website The Guardian, Filipinos spend an average of 10 hours and 2 minutes online every day using mostly their mobile devices.
With many Filipinos enjoying this kind of mobility, fintech technologies like mobile wallets bring greater functionalities for crypto users now more than ever.
Crypto and the Philippines: What Lies Ahead?
Blockchain and cryptocurrency may still be in its infancy in the Philippines, but in the very near future, it can become a major financial instrument for Filipinos. With the right economic conditions, technological advancements, and heightened crypto awareness, the odds are definitely in the crypto industry’s favor.
Check out our blog for more news bits about cryptocurrency and blockchain technology.