The Philippines and Cryptocurrencies: Future to Come

In this article, we will take a look at the current environment and future trends that crypto enthusiasts face in the Philippines. Our team is developing a suite of projects, supported by Noah ecosystem. We have been seeing significant improvements in the way the Philippine regulators and businesses treat crypto and the potential it brings to the world.

We believe that a global adoption of cryptocurrencies would make the Philippines one of the biggest winners due to the country’s economic conditions. Firstly, the country has a low penetration of banking services. Secondly, there are a lot of smartphone users.

Out of 106 million people living in the Philippines, over 60 million are active Internet users, and although exact statistics on smartphone usage are hard to come by, the mobile phone penetration is over 100%, making it plausible for most Internet users to connect from their smartphones.

Thirdly, remittances make up a big portion of the general public’s income base of the country’s population. Crypto-banking might turn the previously unbanked population into active users of various financial, credit, lending, escrow, investment, insurance, reinsurance, hedging, clearance, market-making, liquidity-bringing, trading, saving services. Importantly, these services will be provided without the need to engage intermediaries, be it banks or other financial institutions. This will bring forward efficiencies and cut costs on remittances, which can reach up to 10% for sending money from any country to the Philippines.

And, since 2014, authorities in the Philippines have been paying attention. Unlike China, which banned crypto entirely, or Malaysia, which has been on the fence, the Philippine government has shown that it understands the enormous potential that crypto can bring to the table. While the bigger economies are deliberating how they should tackle the new tech solutions, the more nimble countries like the Philippines can leverage crypto, blockchain and the distributed ledger technology (DLT) in general to offer new services worldwide, subsequently winning from the first-mover advantage.

In January 2017, the Philippine government published Circular №944, which provided a legal framework for the Virtual Currencies (VC) and the crypto exchanges. At that time, this was big news. It showed that the Philippines (in contrast to China) was ready to start thinking about ways to regulate crypto and deliver a sustainable legal framework.

Circular №944 stipulated that the VCs are fungible and can be used to purchase various services online. In this way, they differ from virtual money (such as PayPal or WebMoney) and from any locally-used internal “money units” for rewards programs (such as a loyalty program of an airline that enables savings for subsequently purchased internal services).

In December 2017, seeing the drastic uplift in interest towards crypto, the country’s Central Bank came out with the clear-cut statement that it did not endorse any of the virtual currencies, it did not recognize them as legal tender (standard currency, issued by a nation) and there was a significant risk, associated with investments into financial pyramids, which were cloaking themselves as ICOs. This was just a “defense mechanism”, as the crypto world was in the overload mode with Bitcoin peaking around $20,000.

In February 2018, it became known that the Philippines was set to create the “Crypto Valley” in the Cagayan Special Economic Area. The information was published about several partnerships with Japanese-led companies and funds, which were to help bring regulations, technical solutions and practical implementations to players, driving development.

In the end of April 2018, Reuters published the report, showing the activation of the efforts to attract crypto platforms to the zone. These entities would be able to carry out ICOs, operate crypto exchanges and deliver any other services concerning cryptocurrencies.

New Hub Being Created Right Now

Clearly, we are seeing the establishment of the new crypto hub. Notably, the Cagayan Special Economic Area has been successful in attracting various gambling companies (although some onerous restrictions were brought down in the recent years) and driving trade by leveraging local free-port capabilities.

The Philippine Government is trying to simultaneously promote and contain the new type of tech, which is achieved by allowing the companies to carry out broad-based crypto-driven activities within the special area, while also prohibiting them from exchanging between crypto and fiat. These measures protect the country’s economy from money-laundering, terrorism financing or any other wrongdoings with its legal tender.

This nascent hub might become a welcoming “safe space” for mining operations and exchanges that are fleeing China’s complete ban on any transactions in crypto, exchange activities and a pretty harsh outlook on mining.

In addition, the rich cooperation of networks between Japan and the Philippines might bring in a huge influx of Japanese-backed investment, helping the country to finance a unique set of projects.

Similar to such projects, Noah ecosystem with the Noah Coin (NOAH) used as its internal token, is a place that will help greenfield existing projects in the Philippines, leveraging the capabilities of crypto and distributed ledger technology. One of the key future assets is the Noah Resort located on the sunny beaches of the Philippines. Here, crypto lovers and people who just want to dip their toes in the crypto world will be able to chill out and network, soaking in sun and marveling at the picturesque mountain landscapes of the island.

Quite recently, plans have been launched for setting up the “university” in the Special Economic Zone, to help train personnel in cryptocurrency, blockchain and various use cases of the underlying technology.

Our idea is to raise awareness of fintech innovations by showing the world how their use can help propel a tourist center, thus sidestepping lectures and presenting the real use case to anybody who cares to look our way.

We invite you to join our unique Noah Project designed to bring crypto supporters together in one place and allow them to use all the advantages the new technology and cryptocurrency can offer.

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