The Philippines is witnessing a resurgence in cryptocurrency enthusiasm, with Bitcoin reaching a record high of approximately $68,000 and propelling other digital currencies, including Ether, upwards. This renewed interest has sparked various crypto-related activities across the nation, from billboard advertisements for crypto companies in Manila to the rise of virtual crop farming in the crypto game Pixels, and the emergence of metaverse Filipino workers (M.F.W.s).
Crypto Transactions Surge
Data from Chainalysis indicates a significant 70% increase in the value of crypto transactions in the Philippines from September and October to November and December, totaling $7.3 billion. The player base for Pixels skyrocketed to over 830,000 in March from just 80,000 in November, underscoring the country’s growing fascination with crypto-earning video games.
Government’s Regulatory Concerns
The booming crypto activity has prompted Philippine officials to express concerns over how to regulate the rapidly evolving sector. Kelvin Lee, a former commissioner at the Philippines’ Securities and Exchange Commission, highlighted the challenge of fostering a safe and orderly crypto industry amidst its surging popularity. Fraud, scams, and the volatile nature of tokens distributed by crypto-earning games are among the risks that have prompted calls for cautious regulation.
Digital Currency Initiatives
Amidst the crypto craze, the Philippines’ central bank announced plans to introduce its digital currency within the next two years, signaling the government’s interest in harnessing the benefits of digital finance while addressing regulatory challenges.
The Pandemic’s Role in Crypto Adoption
The pandemic lockdowns played a crucial role in accelerating crypto adoption in the Philippines. With over 40% of the population lacking bank accounts but widespread internet access, many Filipinos turned to crypto as a financial alternative. Games like Axie Infinity became particularly popular, with its in-game cryptocurrency, Smooth Love Potion, being accepted by some landlords and businesses as payment.
However, the subsequent crypto market collapse left many Filipinos with significant losses, underscoring the industry’s risks. Despite these setbacks, the community remains resilient, with individuals like Mr. Dela Cruz, a former Axie Infinity player turned Twitch streamer and e-sports team captain, finding new avenues within the crypto and gaming sectors.
Looking Forward
While the crypto industry in the Philippines is marked by both opportunity and risk, many Filipinos are prepared to pivot to other ventures if needed. The ongoing developments in crypto regulations, digital currency initiatives, and the persistent enthusiasm for crypto and gaming illustrate the complex landscape of digital finance in the Philippines. As the country navigates these waters, the balance between innovation and consumer protection remains a key focus for regulators and participants alike.
