The tiny resort town on the central Philippines' west coast is being transformed into a "Bitcoin Island," with cryptocurrency wallet provider Pouch on an assertive campaign to boost bitcoin uptake on the island over the last four months.

According to Pouch vice president Bill Hill, 120 businesses on Boracay have signed up to accept BTC payments. He plans to establish a bitcoin-only micro-economy while also promoting crypto tourism.

"Right now, we're concentrating on convincing businesses to take payment, so there's somewhere to spend," Hill explained in an interview.

"Being able to top up pre-paid phone credits without any fees on any carrier is a remarkably killer app. The stores love it because it's a no-fuss way of supporting all carriers simultaneously," he added.

Pouch, founded in 2021 by American expatriate Ethan Rose, is a bitcoin wallet provider that utilizes the Bitcoin payment layer Lightning Network, letting users "seamlessly send and receive [money] across borders." According to the wallet's website, it remains in beta testing.

Multibillion-dollar remittance market

The company's primary goal is to use faster and cheaper bitcoin transactions to enter the world's third-largest multibillion-dollar Filipino remittance market. Digital nomads — Bitcoin enthusiasts who feel at home far from home — are being considered.

According to Hill, the Pouch VP, bitcoin adoption will save Filipinos millions of dollars in remittance commissions each year while providing financial services access to those who do not have bank accounts.

"The remittance market is taking shape. That is the main goal. Over $35 billion enters the country every year, losing approximately 7% to fees and taking one to 3 business days." We immediately reduce that to around 1% or less," Hill said.

Filipinos working abroad sent $31.4 billion home last year to support their families. The funds are frequently used to pay for education, buy food and clothing, start a business, build a house, and cover daily living expenses.

It is a critical survival tool for Filipino families. However, financial institutions such as banks take excessive money in transfer fees. According to the World Bank, the average global expense of sending remittances is around 7%, with South Asia having a cost of more than 5%.

When compared to the Sustainable Development Goals' target of reducing financial transfer costs to less than 3% of total transaction value by 2030, this is far too expensive.

He disclosed that some of their staff and providers are already getting paid in bitcoin via Pouch, which he believes will become commonplace in Boracay in a few months.

Despite the entire priority being on Boracay, Hill is convinced that its key selling point, which involves reducing transaction fees, will give its product national significance all throughout the Philippines.

Most of the 120 businesses currently signed up on 'Bitcoin Island,' along with restaurants and coffee shops, are in the hospitality industry. Bitcoin can now be used to buy fruits, vegetables, meat, and fish. Hill anticipates that bitcoin use will boost the Philippines' overall economy.

Bitcoin acceptance

Boracay, with a population of 35,000 people, becomes a part of a study to transition away from traditional fiat currency. It will, however, not be the first city in the world to attempt to run on bitcoin.

El Salvador has 'Bitcoin Beach,' and Honduras has 'Bitcoin Valley.' El Salvador will be the first nation to recognize BTC as a legal tender in September 2021.

The country’s bitcoin bet has been severely harmed by the cryptocurrency market downturn and criticism from the IMF and rating agencies. It's $107 million in publicly disclosed holdings is now worth only $46 million.

To combat volatility, Pouch will enable users to make and receive instant payments in the local peso currency, according to the company's website.

What do you think about the adaptation of Bitcoin in The Philippines? Do you think that there will be more countries to follow suit? Let us know your comments by sharing this article on social media.

Sep 21, 2022
Digital Lifestyle

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