Crypto Wallet Provider Looks to Turn Philippines Resort in Boracay into ‘Bitcoin Island’
People can now pay for home cooked food from roadside restaurants known as ‘carinderias’ using bitcoin in Boracay, Philippines which is famous for its white sand and palm trees.
The small resort town in the center of the Philippines, along the west coast, is being transformed into a ‘Bitcoin Island.‘ Over the past four months, cryptocurrency wallet provider Pouch has been aggressively increasing the uptake of bitcoin on the island.
Large and small companies sign up
About 120 businesses big and small in Boracay have so far signed up to allow users to make payments in BTC, according to Pouch vice president Bill Mill. The plan is to establish a micro-economy that runs entirely on bitcoin, he said, while also promoting crypto-tourism.
“Right now we’re focused on getting businesses to accept payment, so there’s a place to use,” Mill told Be[In]Krypto in an interview.
“The ability [for people] topping up prepaid phone credit with no fees on any carrier is a surprise killer app. The stores love it because it’s an easy way to be able to support all carriers at once (sic),” he added.
Founded by American expatriate Ethan Rose in 2021, Pouch is a bitcoin wallet provider that leverages the Bitcoin payment layer Lightning Network, allowing users to “seamlessly send and receive [money] across national borders.” The website says the wallet is still in beta testing.
The billion-dollar remittance market in the Philippines
The company primarily aims to tap the multibillion-dollar Philippine remittance market, the world’s third largest, with faster and cheaper bitcoin transactions. Digital nomads – BTC lovers who feel at home away from home – are also taken into consideration.
Mill, the Pouch VP, said bitcoin adoption will help Filipinos save millions of dollars each year on money transfer fees while providing access to financial services to the unbanked.
“The remittance market is starting to happen. That’s the big goal,” Mill told Be[In]Crypto. “Over $35 billion comes into the country every year, losing about 7% to taxes and taking one to three business days. We’re reducing that to about 1% or less immediately.”
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 clothes, start a business, build a house and cover daily living costs.
It is an important tool of survival for families in the Philippines. But too much of the money is taken in transfer fees by financial companies such as 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 SDGs’ goal of cutting the cost of financial transfers to within 3% of total transaction value by 2030.
Presidential invitation
Pouch is licensed by the Central Bank of the Philippines to facilitate transactions in the local peso as well as bitcoin. While regulatory compliance in the Philippines has been smooth, it remains “a huge hurdle and expensive” in the US
“We would like to be invited into the president of [the] Philippines office to discuss this project,” Mill said of ‘Bitcoin Island.’
He revealed that some of their employees and service providers are already being paid in bitcoin using Pouch, which he believes will be common in Boracay in a few months.
“Something as simple as payroll services is an unsolved problem here,” Mill said. “We’re fighting for every inch of adoption that creates a circular economy right now.”
Although the immediate focus is on Boracay, Mill is confident that its unique selling point, which includes low transaction fees, will give the product national relevance across the Philippines.
“We are really trying to gear up for the start of the tourist season in October. Already, casual bitcoiners are here, watching the businesses and spending statistics. The more that happens, the more it is necessary to accept bitcoin,” he explained.
Of the 120 businesses that have already registered on “Bitcoin Island”, most are in the hospitality sector, including restaurants and coffee shops. Fruit, vegetables, meat and fish can now be paid in bitcoin.
Mill expects the broader economy of the Philippines to see a boost due to the use of bitcoin.
“If the entire remittance market were to switch to bitcoin that shines, it would increase the GDP of the entire country by 1%. This does not even include the gains for internal remittances within the country,” he said.
Bitcoin volatility
With a population of 35,000, Boracay is becoming part of an experiment to migrate away from the traditional fiat currency. However, it will not be the first city in the world to try to run on 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 venture has been hit hard by the downturn in the crypto market and the backlash from the IMF and rating agencies. Its publicly disclosed holdings of $107 million are now worth just $46 million.
To manage volatility, Pouch will allow users to make and receive instant payments in the local peso currency, the website said.
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