THE use of bitcoin in the Philippines is still in its early stage. Although Filipinos are known in the global arena as heavy users of short messaging services and Facebook, the use of bitcoin is not yet pervasive in many areas, such as business-to-business transaction and shopping.
Nevertheless, John Bailon and Miguel Antonio Cuneta made a leap of faith by establishing Satoshi Citadel Industries (Bitmarket.ph) Inc. in 2014, because they support and believe in the potential of bitcoin. Moreover, Cuneta and Baylon are pushing the propagation of blockchain technology, regarded as coding breakthrough. This coding breakthrough—which consists of connected blocks of transactions—enables competitors coexist in a digital ledger across a network of computers without need for a central authority.
Cuneta, Satoshi Citadel Industries (SCI) cofounder, shares in an interview via email the different insights of the bitcoin industry in the country today and the importance of bitcoin in the digital economy.
Why did you and your cofounders put up Satoshi Citadel Industries?
When we started SCI, we did not even consider ourselves as a start-up.
The founders just had a common passion for the potential of the technology behind bitcoin, and decided that we wanted to set up a service that would allow any merchant or professional to accept payments in bitcoin and not have to worry about understanding the technology behind it.
The goal was to give the small players in Philippine e-commerce a way to enter the digital economy without credit cards or other similar but prohibitive payment methods. From there, it just evolved very fast into what it is today.
What are the benefits of bitcoin to the financial system of the country? What is its role in the economy?
The main benefits of a free, open and decentralized payment system like bitcoin are still being discovered as we speak.
Number one, it does not cost anything to use this technology. Two, it is open-source and available to all, and allows for interoperability between different bitcoin-related services.
Currently, it allows merchants to accept payments online without the need for credit cards or PayPal (which has fraud, chargebacks and prohibitive cost). It has also spawned a new industry pioneered by SCI, called “Rebittance,” or “bitcoin remittance”. It allows for much cheaper transfer of money to the Philippines, which is especially useful for millions of overseas Filipino workers.
The role of bitcoin in the economy is still very tiny, but has the potential to become a very large and robust industry in the near future, if developments continue at today’s pace.
How does bitcoin trading work?
Bitcoin trading works like foreign-exchange trading.
People buy and sell bitcoin on international exchanges using US dollar, Chinese yuan, euros, Japanese yen, etc., and this allows the price of bitcoin to be determined by the free market.
Can you describe the current bitcoin market in the country today?
The Philippines has one of the most active bitcoin industries in the world today.
Several start-ups have been established and have achieved some degree of success in terms of traction, volume and VC investments. SCI, for example, closed its seed round of investment with the backing of South Korean tech giant Kakao, a $10-billion company. The volume of bitcoin transactions is growing month on month, and most of the past negative image of bitcoin is now replaced by legitimate interest from all sectors of finance and technology. It is a few years away from making it to the mainstream market, but the growth is comparable to the early days of the Internet industry.
What are the benefits of investing in bitcoin? As a follow-up, what are the challenges in investing in bitcoin?
We do not encourage people to speculate in the price of bitcoin, as it is a very volatile and risky asset to hold.
We provide financial services using bitcoin as an underlying technology, instead. Investing in bitcoin is something that needs a lot of research and understanding of the technology and the market.
If you wish to buy and sell bitcoin safely, we provide services that can facilitate this, such as Buybitcoins.ph.
Do you think it will take a longer time for the Philippines to accept bitcoin?
The Bangko Sentral ng Pilipinas already released Circular 944 last week, the new regulations for virtual currency business that wants to operate in the Philippines, which means that bitcoin technology platforms, such as SCI, are basically considered legitimate services today.
For mainstream users to start using bitcoin, it will take several years, just like any new technology. We will need to provide a “killer app” for bitcoin to be easily used by anyone, and that is what SCI is working on developing today.
How does SCI help bitcoin trading in the country?
SCI’s flagship service today is Rebit.ph, a bitcoin-remittance service.
This means that there are a lot of bitcoin coming from abroad into the country. We provide every necessary service for any person to buy, sell, remit, pay bills, accept payments and other kinds of financial activities, using bitcoin technology.
We also provide a lot of educational talks for the general public, mostly in universities, to teach the new generation of finance professionals, computer programmers and entrepreneurs about the revolutionary technology behind bitcoin