“Bitcoin? Isn’t that just a hotbed for scams and Ponzi schemes?”
Surprisingly, after my ten years of working in this industry, I still get this response when I tell people I co-founded SCI Ventures Inc. and its subsidiary, Rebittance Inc.—the first BSP-licensed, Filipino-owned Bitcoin startup.
This response was expected in 2013, when Bitcoin was unheard of and the entire market was worth around $1 billion.
Today, not so much. Bitcoin’s global market capitalization has grown exponentially, reaching over $1 trillion in 2021. The Bangko Sentral ng Pilipinas now regulates 18 Virtual Asset Service Providers as legitimate money-service businesses. The country’s biggest e-money players and digital banks such as Maya, Unionbank, and GCash, have added Bitcoin and Crypto to their suite of services.
To give you a clearer idea of this growth, when I joined the Bitcoin Philippines Facebook group in 2013, it only had around 300 members. Now an estimated 13 million Filipinos have used, traded, or held Bitcoin and Cryptocurrencies for payments or investments.
When we started our company in 2014, one Bitcoin was worth around P11,000—it’s currently at P1,505,000. Beyond its price, the Philippines is among its early adopters; the BSP was one of the first in the world to regulate companies using this new technology in 2017, with the rest of the world just recently catching up.
Because of the open nature of Bitcoin's network and technology, our startup explored many use cases for Bitcoin back in 2014, without the need to ask permission from anyone. We tried everything, from merchant payments, remittances, prepaid cards, bill payments, and even social media and digital wallets. We experienced exponential growth, eventually finding venture capital investors in the likes of South Korea’s Kakao Talk and Cebuana Lhuillier here in the Philippines.
We also engaged with the BSP during that time and, in 2017, became the first Philippine-based company to be granted the historic Virtual Currency Exchange License, legitimizing our industry and the use of this technology on financial applications.
Today, I am involved in a new venture called Stanible.com, a platform that gives digital artists, creators, and their fans the freedom to create and own digital art or collectibles. It uses blockchain technology in the form of NFTs to allow local artists to monetize their content in a way where they can earn and receive royalties automatically.
There are many more use cases and applications being explored for this technology, and because anyone can use it, innovation is not far behind.
That’s the truth of it: Bitcoin is not an investment scheme, but a breakthrough in computer science with 3 decades of research in cryptography behind it.
Bitcoin is, first and foremost, an internet-native value transfer network. The invention of Bitcoin in 2008 has given us, for the first time, a way for one person on the internet to send, receive, or store digital value without the need for a middleman like a bank or financial institution. The technology guarantees that the transfer is safe and secure, where everyone in the network can see the transfer take place, and the recording of the transaction is uncensorable and unstoppable. This is what’s now called Blockchain technology.
“Bitcoin is not an investment scheme, but a breakthrough in computer science with 3 decades of research in cryptography behind it.”
The growth of this industry in the Philippines has a number of reasons. For one, we are a nation that gets more than 10% of its GDP from remittances—around $30 billion per year. Millions of Filipinos send money back home, and they are paying between 5% to 9% in fees. A peer-to-peer value transfer network presents an opportunity to cut these costs and make the process more efficient.
Another reason is that, for a long time, around 98% of commerce done in the Philippines was in cash. E-money, or even digital cash such as Bitcoin, was not trusted enough, making commerce move slow and cumbersome. Today, and mostly due to the pandemic, Filipinos have embraced digital payments at an accelerated pace, with the biggest e-money companies like GCash and Maya growing to almost 100 million users combined.
Lastly, Filipinos are mostly unbanked, since traditional banks are not financially inclusive. It was only recently, with the explosive growth of e-money financial services and virtual asset service providers accelerated by the pandemic, that we started seeing more Filipinos get access to financial services and become comfortable with using digital payments.
As a currency, Bitcoin also had a 14-year history of value appreciation despite its notorious price fluctuations. Anyone who put a percentage of their investments or savings into Bitcoin has seen its value preserved and appreciated over time. This means, unlike traditional currencies that are affected by inflation, you can save your time and effort in an asset class that is free from debasement. And because you can buy fractions of this currency, it does not discriminate as to who can choose to save their money in Bitcoin.
It’s an alternative financial system for many, where alternatives are few and far between.
When we say that Bitcoin is a great tool for promoting financial freedom for Filipinos, we don’t mean that it will make you rich quickly. It is an open financial network where everyone has the freedom to use it without permission, without prejudice, and without censorship. It's freedom, not "free money."
“Bitcoin is starting to challenge the way we see trade, ownership, and trust in a digital-native world. And for the first time, Filipinos are at the global forefront of this adoption curve.”
Just like any new technology in its early stages of development, decentralized protocols like the Bitcoin network will be facing more challenges before gaining mainstream adoption, much like the internet itself. The fact that Bitcoin challenges that status quo and breaks the lucrative positions of the gatekeepers of the financial world adds even more resistance to its adoption and success.
But, just like how the internet started as a disruptive technology challenging legacy media, publishing, and the telecommunication networks of the world, Bitcoin is starting to challenge the way we see trade, ownership, and trust in a digital-native world. And for the first time, Filipinos are at the global forefront of this adoption curve.