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The growth of crypto adaptation in Southeast Asia is speedy. According to Finder, a financial technology website based in Australia, several Southeast Asian countries are included in the Top 15 Crypto Adoption Index released in July 2022.
Bitcoin is the most popular coin, with 39% in the Philippines. Of the 7,514 internet users surveyed by Finder, 16% or 11.6 million people in the Philippines own cryptocurrency. This makes the Philippines rank 10th, followed by Indonesia and Malaysia.
This is evidenced by the fact that 40% of Axie Infinity game players (play-to-earn games) come from the Philippines. Omar Moscoso, the co-founder of AAG Ventures (Philippine-based P2E union), also confirmed that the Philippines has the potential for mass adoption of digital assets. Covid-19 has also triggered a digital transformation in the country. Digital payments accounted for 20% of total financial transactions in the country in 2020, an increase from 14% in 2019. In addition, in 2020, e-money transactions reached PHP 2.39 trillion (US$46.5 million), an increase of 61% compared to 2019.
Binance also saw this opportunity and made the Philippines the country they wanted to expand. A CEO, Changpeng Zhao, at a press conference in Manila, stated that they are trying to obtain a VASP license and an electronic money issuer license from the country’s central bank, Bangko Sentral ng Pilipinas (BSP). The permit allows them to offer crypto asset trading and conversion services to the Philippines, with the ultimate goal of creating electronic money.
Binance’s impact has also been huge for the country. Quoted from Cointelegraph, Binance receives large amounts of Philippine pesos for its peer-to-peer service (PHP/USDT). The far more favourable tariff compared to local service providers is the reason. If Binance gets a BSP license, it will legitimize and strengthen its position in the Philippine market.
This development is suitable for a growing ecosystem to address the concerns that inevitably arise when considering integrating digital assets into existing financial and economic ecosystems. At the same time, Hong Kong introduced a licensing regime for VASPs in June this year, which imposes statutory AML/CTF requirements for companies wishing to operate in the country.
Philippine Government Supports Use of Digital Assets
Regulations governing companies or individuals using digital currencies are still not strict because the adoption is still in its early stages. However, the country’s government is interested in adopting blockchain technology for various economic sectors such as health care, financial support, emergency assistance, issuance of passports and visas, trademark registration, and government records. The Philippine Department of Science and Technology has already started conducting blockchain training for researchers in the department.
On the other hand, some entities monitor the irregularities of digital asset companies. Infrawatch PH asked the Philippine Department of Commerce and Industry to conduct an investigation into Binance as to how they were promoting in the country without having the proper permits. The Philippine Department of Commerce and Industry responded that they had not set clear guidelines for the promotion of digital assets.
The launch of the Central Bank Digital Currency (CBDC) will be a digital transformation gamechanger, given that most Filipinos do not have bank accounts which means it is not regulated in matters such as taxation. CBDC is expected to reach segments not served by the banking system, such as rural households, by utilizing cellular technology.
Currently, around 70% of adults will use digital accounts for digital transactions, which allows consumers to have another position that can keep them away from loan sharks.
The Philippines continues to adopt blockchain and cryptocurrencies during the current bear market. A good community perspective makes the Philippines have the potential to become a cryptocurrency centre, especially in Southeast Asia.
This article also answers SeaSquad’s question which asks about which country community SeaDEX will launch soon. With all the potential and acceleration of crypto adoption in the Philippines, you have decided to launch the SeaDEX Philippines community. Following the Indonesian community, which had already been launched.