Bitcoin is no longer the quirky, niche payment system it was once, as businesses in Argentina and the Philippines have rushed to embrace it. If you still think that, you should think again.
It seems that emerging markets always embrace new methods of payments, and Bitcoin is the latest example. The crypto-currency is growing, and indeed thriving, in some economies. Interestingly enough, for very different reasons.
In Argentina, Bitcoin has become a natural alternative to traditional cash. The use of Bitcoin in Argentina doubled in 2015, amidst economic stagnation and double-digit inflation. Government policy has also helped to drive the country’s Bitcoin boom, with restrictions on access to foreign currency created an overvalued exchange rate.
One small business owner, the owner of a budget hostel in Buenos Aires, has found Bitcoin helpful in the face of the country’s inflated Peso. The businesswoman takes credit card payments from foreign tourists in return for Bitcoin.
She can then sell bitcoins on Argentina’s unofficial currency market for 50 percent more than she would get at the official exchange rate. Some might say that Bitcoin could save Argentina’s failing economy.
Turning to Asia, the Philippines is one country where Bitcoin has taken root. In a country where only 25% have a bank account, and less than 5% a credit card, the crypto-currency came as an unlikely saviour.
Mobile payment systems are not an affordable option for many in the Philippines. Telcos usually applies 10% in fees when money is sent through Gcash, the local mobile money system operated by Globe, the Philippines’ dominant operator.
Seeing this huge gap in the market, Bitcoin start-up Coins.ph aimed to reach 75% of these ‘unbanked’ Filipinos. The company recently teamed up with convenience store chain 7-Eleven, and is already accepting desposits in the country’s 1600 stores.
E-commerce is another big market where Bitcoins and digital currencies can help more Filipinos pay for goods and services. So far, Coins.ph has made it possible to pay with Bitcoin at two large e-commerce platforms in the Philippines (MetroDeal and CashCashPinoy), as well as with Bench, a clothing and lifestyle brand whose giant ad billboards can be seen along Manila’s highways.
In my opinion, the future of Bitcoin lies within frontier and emerging markets, where the traditional banking system has failed to reach a large part of the population.
Many Bitcoin enthusiasts and start-ups believe that the key to mainstream success for Bitcoin is to educate the general population about its advantages, and encourage people to use it for day-to-day expenses.