While the mass adoption of bitcoin might not be imminent, Filipino businesses risk being left behind by competitors if they don’t prepare in some way for bitcoin to be used for retail payments. With more cryptocurrency exchanges backed by the central bank and 7-Eleven stores accommodating kiosks that facilitate bitcoin transfers, Filipino consumers may increasingly rely on bitcoin as a digital currency in the coming years.
A survey conducted in early 2019 revealed that around 74% Filipino respondents had some awareness of cryptocurrencies, while 32% owned crypto assets at that time and 14% had invested in initial coin offerings (ICOs). An increase in bitcoin trading options and the provision of bitcoin ATMs will inevitably help to boost those percentages.
The rise of regulated bitcoin trading
Bitcoin trading is one of the most effective ways for individuals to familiarise themselves with the digital coin, while the similarities between crypto trading and fiat trading helps to legitimise the use of bitcoin as a currency. The appeal of bitcoin trading should have longevity, despite concerns about what may happen when all the bitcoins have been mined.
There is no longer an obligation for traders to buy or mine bitcoin, as bitcoin trading can take the form of speculation on the crypto’s value. This comes in the shape of CFDs, contracts for difference where the trader predicts if an asset will rise or fall in value across a specified period. At no point does the trader need to take ownership of a token, therefore making this form of bitcoin trading a sustainable pursuit. This positive outlook for the future of bitcoin trading means that the Bangko Sentral ng Pilipinas is likely to increase the number of regulated crypto exchanges in the coming years.
The BSP has already licensed 13 companies that provide cryptocurrency exchanges. One of the main obstacles to bitcoin’s mass adoption was the total lack of regulation, so involvement from central banks is a crucial step in encouraging new traders to explore cryptos. The BSP started regulating exchanges as early as 2017, making the Philippines one of the most forward-thinking countries when it comes to embracing cryptocurrencies.
Integrating bitcoin into a retail environment
The provision of bitcoin ATMs, which are also regulated by the BSP, should increase in the coming years. Bitcoin ATMs allow individuals to easily buy and sell the crypto, with their presence alongside standard cash machines further consolidating the idea of bitcoin as a digital currency. Recent estimates suggest that there are four bitcoin ATMs in the Philippines (two in Manila, one apiece in Quezon City and Taguig).
Bitcoin trading and crypto ATMs will help to develop the idea of bitcoin as a cash equivalent, but its mass adoption will require the widespread use of cryptocurrencies for retail payments. The reason that Filipino businesses should be particularly ready to adapt to bitcoin is because of the work of Abra in the Philippines.
Abra provide a cryptocurrency wallet that can be accessed on mobile devices, with the Philippines one of the company’s largest markets. The CLiQQ kiosks in around 6000 Filipino retail outlets give Abra users a platform to convert cash to crypto using their wallet. Those retail outlets include 7-Eleven stores, with the prestige of the 7-Eleven brand effective at enhancing bitcoin’s exposure in the Philippines.
Speaking in 2019, Jonathan Ravelas, the chief market strategist with Banco de Oro UniBank, stated that around seven in ten Filipinos don’t have a bank account, so cryptocurrencies give these consumers a new way to make payments. The accessibility of bitcoin and the security provided by BSP regulation should encourage an increasing number of Filipinos to adopt cryptos, so Filipino businesses may need to adapt to changing consumer patterns.
