The buzz around Bitcoin has been huge. It seems everybody is talking about it, but its uses have been restricted to a niche type of people and business. If you think that too, should think again.
Emerging markets always seem to embrace new methods of payments. And Bitcoin seem to be growing and thriving in few emerging economies. Interestingly enough, for very different reasons.
Although Argentina is not a technically an emerging market, Bitcoin has become a natural alternative to cash. The use of Bitcoin in Argentina has doubled in 2015, amidst economic stagnation and double-digit inflation. Another reason why Bitcoin is so successful there, was the government restriction on access to foreign currency, which created an overvalued currency 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 overvalued currency exchange rate. She 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 can save Argentina’s failing economy
Let’s go to Asia now, more specifically the Philippines. Bitcoin there came to help the unbanked – only 25% of Filipinos have a bank account, and less than 5% have a credit card. Unlike Kenya with its successful M-Pesa from mobile operator Safaricom, mobile payments transfer methods are expensive. Telcos in the Phillipines usually apply about 10% fees when people send money through the local mobile money system Gcash, operated by Globe, the dominant operator.
Seeing this huge gap in the market, Bitcoin start-up Coins.ph envisioned to reach 75% of the unbanked Filipinos. Coins.ph recently teamed-up with 7-eleven and is already accepting deposits in the country’s 1,600 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 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 brands whose giant ad billboards can be seen alongside Manila’s highways.
In my opinion, perhaps 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 startups believe that the key to mainstream success for bitcoin is to educate the general population about its advantages, and encourage people to use bitcoin for day-to-day expenses.