Why Are Filipinos Into Crypto?

The crypto scene in the Philippines has continued to gain investors since its introduction to the country. The prolonged isolation brought about by the COVID-19 pandemic further exposed middle-class and tech-savvy millennials to develop their interest in this new digital market.

The Philippines takes second in Chainalysis’ Global Crypto Adoption Index 2022, behind Vietnam and ahead of Ukraine, India, and the United States. The Bangko Sentral ng Pilipinas (BSP) reported that cryptocurrency transactions increased 362% yearly to nearly 20 million in the first half of 2021.

Moreover, the Philippines is seen as a top adopter and owner of non-fungible tokens (NFTs), thanks to the popularity of play-to-earn (P2E) NFT games. Around one out of four Filipinos have experienced playing a P2E NFT game. That said, what makes investing in NFTs and cryptocurrency so appealing to the Filipino public?

What is Cryptocurrency?

Cryptocurrency, also known as crypto, is any decentralized digital or virtual currency that uses cryptography to secure transactions. It hasn’t been long since its introduction to the world (2020), but cryptocurrency has slowly built a steady following worldwide.

This currency has no government issuing or regulating authority to record transactions and issue new units. This means anyone can send and receive payments anywhere without the need for banks to verify or any other intermediary institution.

All crypto transaction use technology to encrypt them. This assures safety and security across every network. The transactions are in a public ledger called the blockchain. Users have to “mine” coins by solving complex mathematical problems to create the units of cryptocurrency. Cryptocurrency users can buy currencies from brokers and use them through cryptographic wallets.

Some well-known cryptocurrencies include Bitcoin, Ethereum, Litecoin, and Ripple. Non-Bitcoin cryptocurrencies are known as “altcoins.”

Investment Possibilities in Crypto

Filipino crypto users hope that the increase in crypto investments will allow them to become digital currency millionaires in the near future. The value of cryptocurrency transactions from 2019 to 2020 has reached $1.5 billion.

Because of the safety and security that cryptocurrencies guarantee, many investors believe crypto will gain more value in the long run.

While the market is still volatile, its resilience to inflation or political impact makes it a more stable investment. It isn’t affected by economic fluctuations, bank failures, and other negative phenomena.

Participation of Local and Financial Institutions

In 2019, UnionBank set up the country’s first cryptocurrency automated teller machine that lets users exchange digital units for cash as they launch a fully commercialized service for their customers. Digital bank Paymaya Philippines, Inc. recently relaunched its mobile app as Maya and employed a cryptocurrency feature that allows users to buy and trade digital currencies.

GCash is also taking its space in the cryptocurrency market as it allows users to buy crypto from their GCash wallets across virtual currency exchange platforms like Binance. There is also the Philippine Stock Exchange’s (PSE) desire to host crypto trading as soon as they get crypto governing guidelines from the Securities Exchange Commission (SEC).

This continued interest from the PSE and BSP is a positive indication that the country can expect to see the legitimization of investing and integrating cryptocurrencies into the local scene.

Broadening Crypto Access in the Philippines

Cryptocurrency is on its way to becoming the next big thing in the Philippines as Filipinos grow more digitally aware and tech-savvy. With the freedom, security, and long-term store of value that this digital currency offers, it is no wonder that nearly seven million Filipinos hold cryptocurrencies as of date.

Authorities have also witnessed the potential benefits that crypto can bring. They must further boost this new market by providing the necessary frameworks investors can take advantage of to broaden crypto access and diversify their assets.