So much hype has surrounded Bitcoin and cryptocurrencies in the last few months. Sadly, mainstream media chose to focus on the big price swings and volatility instead of the truly exciting parts — The technology itself. Bitcoin software continues to accelerate each day, with Lightning, Segwit, Schnorr, TumbleBit, MimbleWimble, and more applications are being developed by the best engineers to make the network scaleable for global commerce. Hundreds of startups with thousands of entrepreneurs working tirelessly, developing applications that will redefine our fundamental understanding and implementations of trade, ownership, and trust.
And speaking of exciting, nothing is more exciting for us than what is what’s going on in the Bitcoin and Blockchain industry in the Philippines. Just to give a quick background, The Philippines is one of the world’s fastest growing economies in the last decade, with things like smartphone penetration and internet usage increasing at a rapid pace, estimated to reach 70% our of 100 million people by 2019. The thing is, banking is practically non-existent with around 70% of the citizens without access to formal banking services, and only 3% credit card penetration and 98% of all transactions happening in cold hard cash.
Building The Blockchain Ecosystem
These statistics are part of the reason we established Satoshi Citadel Industries back in 2014. From SCI came popular Bitcoin-powered fintech services such as Rebit for money-transfers, Buybitcoin as an exchange platform, Bitbit as a local Bitcoin and mobile money wallet app, Keza for investments, and Bitmarket for merchants, now well-established and trusted services in their own right. Four years after we started, we’re now more than sixty in the team and growing fast, with the backing of South Korean mobile internet giant Kakao Inc. pushing us forward. But it isn’t just SCI — the playing field is wide open, and players are coming in. There’s also Coins.ph, established around the same time as SCI, and they have quickly established themselves as a reliable mobile money and Bitcoin wallet in the Philippines, gaining around two million customers in the last four years, even as they went head to head with giant national telecom companies for market share.
These two companies now have the first two central-bank issued virtual currency exchange licenses granted in the country — yes, you read that right, the Philippine Central Bank decided to allow companies to legally register with them as a Virtual Currency exchange operator, allowing us to exchange Philippines pesos to cryptocurrency and vice versa. What most people don’t know is that since The Bangko Sentral started issuing these licenses last year, there are a rumored fifteen or more startups and crypto-exchange operators applying for the same license in the Philippines. This means more liquidity and better price discovery for the Southeast Asian market, and of course, more competition in the region. There will definitely be a hotly contested race between different exchanges in the Philippines starting in 2018, and this is great for the industry as a whole. Other notable local blockchain startups have also gained traction in the last two years, most of them tackling the $27 billion Philippines remittance industry. The industry is not just growing, it’s thriving.
Today, you can use Bitcoin to send Philippine pesos to anyone, anywhere in the Philippines, fast and cheap, and they don’t even need to understand how Bitcoin works. You can also pay bills, buy mobile phone credits, and buy or sell Bitcoins easily too. This is a pretty big deal.
A Potential ICO and Crypto Haven
You can’t have a thriving Blockchain ecosystem without ICOs, right? Well, since late 2017, there have been at least three ICOs launched in the Philippines that have raised upwards of $10 Million each — namely SalPay, Pawnhero, and Loyalcoin. They are all Philippine-based services, and they have shown that the market is receptive to these kinds of endeavors. There are at least three local ICOs slated for 2018, with several more rumored to be in the pipeline by other startups. We are seeing a big shift in the local startup industry from a traditional one into a blockchain-powered one. Tokens are starting to become an attractive option for innovative startup ideas.
On the regulatory front, SCI has been in talks with the Philippine SEC and they have expressed positive interest in regulating ICOs in a way that won’t stifle innovation but will also allow companies to do it in a legal and compliant manner. The SEC even issued its first cease-and-desist order for an ICO that was deemed to have been done illegally. This could pave the way for the Philippines to establish itself as an ICO haven for companies from all over the world.
Growing Awareness and Acceptance of Crypto
Judging by how established financial institutions have reacted to broad public interest in the blockchain and crypto space, it’s not impossible to see the Philippines become a crypto-haven for businesses in the very near future. A great example is how a top-tier local commercial bank like Unionbank Philippines announcing partnerships with blockchain projects. This is a huge deal because just a few years ago when we were starting SCI, banks would not touch us with a ten-foot pole. Ever since the BSP (Central Bank) established guidelines and regulations for crypto-businesses, most banks have been open to working with Bitcoin/blockchain startups even as banks in countries like Singapore and Hong Kong have been closing down crypto related bank accounts. Financial institutions here now have their own blockchain research teams, or are actively looking in to the benefits of Bitcoin as an alternative money transfer technology. Some other notable developments are rumors of a crypto-haven opening in a special economic zone, talks of big mining operations setting up here, more merchants and retail stores willing to accept cryptocurrencies, and a rapid acceleration of awareness and recognition of the industry by local mainstream media.
As we move into 2018 and beyond, the SCI team will keep working even harder, and I think it is safe to say the same for the other players in our industry. For us, being a trailblazer is something we take seriously, and although it brings in much needed attention to the the work we do, the price of cryptocurrencies doesn’t really matter to us. It’s a sideshow at best, a distraction most of the time. The really exciting part mostly goes unnoticed— infrastructure building, rapidly unfolding developments, exponential growth, and laying down the foundations of a new and disruptive industry.
Just Keep Paddling
The real work is happening beyond the hype, like a duck in a pond looking peaceful above the water but furiously paddling underneath. Guess what? The same thing is happening everywhere, with our counterparts around the world also building the foundations of their respective industries. So, the next time you hear people bragging about the price when it skyrockets, mocking others when it dips, or just arguing about the price of Bitcoin or any other cryptos, know that the price does not accurately reflect the sheer amount work, ideas, applications, and immeasurable value being infused into the network.