Crypto for Remittances and Inclusion in the PH

Based on data from the Bangko Sentral ng Pilipinas (BSP) transactions in virtual currencies, which include cryptocurrencies, increased by 71% in the first semester of 2021 amounting to an estimated ₱105.93 billion.

Since the pandemic, the popularity and users of cryptocurrencies have increased tenfold and the Philippines is known to be one of the world’s fastest adopters of this virtual asset.

More than using cryptocurrencies as an investment,  this has also been widely known to revolutionize payments and remittances.

Last year during the forum “Fintech’s Place in the Growth of Cryptocurrencies” then BSP Technology Risk and Innovation Supervision Director Melchor Plabasan stated that “We have also seen a number of remittance companies now using crypto to remit money instead of using the traditional clearing and settlement models. We have also seen institutional investors as well joining the crypto world, which of course, we can somehow attribute to regulatory certainty,”

The 2022 report released by the Philippine Statistics Authority mentions that the Philippines is home to over 1.77 million Overseas Filipino Workers (OFWs). With the government recently adding a Department of Migrant Workers (DMW), this number is expected to increase with the easing of restrictions and the number of Filipinos looking for better pay abroad.

Each dollar would count to OFWs who work hard to send money back home. Remittances from OFWs contribute an estimated 10% to the country’s GDP. With apps like Binance and Coins.ph, transferring money beyond borders and through countries will no longer take days up to weeks, but will only take a couple of seconds. Users would also no longer need to wait long lines and travel to bayad centers just for a single transaction and can make several transactions at home by just using their smartphones.

Aside from convenience and speed, cryptocurrencies can be used as a tool to expand financial inclusion. According to a study conducted by World Bank’s (WB) Global Findex Database back in 2021, an estimated 9.23 million adult Filipinos are unbanked. With cryptocurrency apps, users do not need bank accounts to join, thus empowering more Filipinos by providing accessibility.

Aside from cryptocurrencies, NFTs or Non-fungible tokens have also garnered attention in the past year and there have been only increasing numbers of NFT users in the country. There are also available apps like Binance which can buy and sell NFTs which create more opportunities for cryptocurrencies in the country.

Sources: Business Mirror, PSA, Manila Bulletin, Business World