People can now pay for homemade meals at roadside restaurants known as “carinderias” using bitcoin in Boracay, the Philippine island famous for its white sand and palm trees.
The small resort town in the central Philippines along the west coast is being transformed into a “Bitcoin Island.“Over the past four months, cryptocurrency wallet provider Pouch has aggressively campaigned to increase bitcoin usage on the island.
Small and large companies register
According to Pouch Vice President Bill Hill, some 120 businesses, large and small, in Boracay have so far signed up to allow users to make payments in BTC. The plan is to establish a micro-economy running entirely on bitcoin, he said, while promoting crypto tourism.
“Right now we’re working to get businesses to accept payment so there’s somewhere to spend,” Hill told Be.[In]Crypto in an interview.
“The capacity [for people] recharging their prepaid phone credits free of charge on any operator is a surprisingly deadly application. Stores love it because it’s a simple way to be able to support all carriers at once (sic),” he added.
Founded by American expat Ethan Rose in 2021, Pouch is a Bitcoin wallet provider that leverages the Bitcoin Lightning Network payment layer, allowing users “to seamlessly send and receive [money] across borders.” Its website says the wallet is still in beta testing.
The billion-dollar remittance market in the Philippines
The company primarily aims to tap into the multi-billion dollar Philippine remittance market, the third largest in the world, with faster and cheaper bitcoin transactions. Digital nomads – BTC lovers who feel at home away from home – are also considered.
Hill, Pouch’s vice president, said adopting bitcoin will help Filipinos save millions of dollars each year on remittance fees while providing access to financial services to those without. of bank account.
“The remittance market is starting to exist. That’s the big goal,” Hill told Be[In]Crypto. “Over $35 billion enters the country every year, losing about 7% in fees and taking one to three business days. We bring that down to around 1% or less and instantly.
Last year, Filipinos working abroad sent $31.4 billion to support their families back home. The money is often used to pay for education, buy food and clothing, start a business, build a house and cover living expenses.
It is a vital survival tool for families in the Philippines. But too much of the money is taken as transfer fees by financial companies like banks. According to the World Bank, the global average cost of sending remittances is around 7% and over 5% for South Asia.
This is far too costly compared to the Sustainable Development Goals target of reducing financial transfer costs to less than 3% of total transaction value by 2030.
Pouch is licensed by the Central Bank of the Philippines to facilitate transactions in local peso, as well as bitcoin. While regulatory compliance in the Philippines has gone smoothly, it remains “a big and costly hurdle” in the United States
“We would love to be invited into the chair of [the] Philippines Office to discuss this project,” Hill said of “Bitcoin Island.”
He revealed that some of their employees and service providers were already being paid in bitcoins using Pouch, which he said will be commonplace in Boracay in a few months.
“Something as simple as payroll services is an unresolved issue here,” Hill said. “We fight for every inch of adoption by forging a circular economy now.”
Although the immediate focus is on Boracay, Hill is confident that its unique selling point, which includes low transaction fees, will give its product national relevance throughout the Philippines.
“We are really trying to prepare for the start of the tourist season in October. Already, random bitcoiners are out there seeing businesses and spending sats. The more this happens, the more imperative it is to accept bitcoin,” he explained.
Of the 120 companies that have already registered on “Bitcoin Island”, most belong to the hospitality sector, including restaurants and cafes. Fruits, vegetables, meat and fish can now all be paid for in bitcoins.
Hill expects the wider Philippines economy to see a boost from the use of bitcoin.
“If the entire remittance market were to switch to bitcoin in the form of rails, it would increase the GDP of the entire country by 1%. It doesn’t even include earnings from remittances within the country,” he said.
With a population of 35,000, Boracay is part of a traditional fiat currency migration experiment. However, it won’t be the first city in the world to attempt to operate with bitcoin.
El Salvador, the first country to adopt BTC as legal tender in September 2021, has “Bitcoin Beach” and Honduras has “Bitcoin Valley”.
El Salvador’s bitcoin bet has been hit hard by the crypto market downturn and pullback from the IMF and rating agencies. His publicly disclosed holdings of $107 million are now worth just $46 million.
To deal with volatility, Pouch will allow users to make and receive instant payment in the local currency in pesos, it says on its website.
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