Bitcoin remittances to the Philippines have gone up. Here’s why

Christmas has come early for Philippine Bitcoin remittance service Rebit.

Rebit, one of the verticals under Bitcoin umbrella company Satoshi Citadel Industries (SCI), has booked an average 150 percent growth in value of transactions month-on-month since October. That’s a big jump from the usual 80 percent growth it registered during the first few months from its launch in July. The company declined to give amounts when asked.

The reason for the spike is obvious: remittances from overseas Filipinos usually peak in the run-up to Christmas because of holiday spending, and Rebit has been able to capture a portion of that market.

Rebit, together with partner Bitspark, piloted a remittance corridor in Hong Kong, where there are over 130,000 working Filipinos who send back to the Philippines about half a billion US dollars in remittances based on the latest government data.

“To put things into perspective, we’re working to build a Bitcoin remittance business during a year in which the Bitcoin price has steadily declined, and we’ve chosen one of the top five most competitively-priced remittance corridors in the world – Hong Kong to the Philippines – to pilot our service. The fact that we’re still able to show growth is a hugely positive sign that Rebit and the whole concept of Bitcoin-based remittances is both sustainable and potentially extremely profitable,” says Luis Buenaventura II, head of product at SCI.

For the Bitcoin community in the Philippines, the triple-digit growth in transaction value, no matter how small a portion of the remittance pie it may be, is a huge improvement considering that Bitcoin adoption is still in nascent stages and the business concept is new: the very first Bitcoin-powered remittances were sent only in the third quarter this year, Buenaventura notes.

It’s true that Rebit has Filipino culture to thank for its strong numbers the past couple of weeks – the Philippines is known to have the world’s longest Christmas season, which starts as soon as the “ber” months kick in, and many Filipino families rely on remittances to fund their lavish celebrations.

But Buenaventura also attributes their growth to the perks Bitcoin remittance offers both individuals and businesses.

He says one other reason their transactions spiked is because tech startups have started to use Bitcoin for payroll. “We’re seeing a bit of enterprise use, instead of just personal remittance, by employers in the US with staff in the Philippines.”

It’s efficient

While the cryptocurrency is considered very volatile as an investment asset because its price fluctuates wildly, the Bitcoin community says it has real utility for money transfer and payment. Why? Two main reasons: it’s quick and cheap.

Settlements using Bitcoin are almost instant, versus about an hour through, say, Western Union, and two to three days through banks. But Western Union is only able to do it that fast because it uses a “pre-fund” remittance model, where the receiving end of the remittance has a very large cash reserve it uses to fund the payouts immediately, explains Buenaventura. The actual remittance takes days to pass through the so-called automated clearing house network. He says the large capital requirement is the biggest barrier to entry in the money transfer industry.

But there’s no such problem with Bitcoin. “The receiving entity on the Philippine side can immediately sell that Bitcoin in exchange for local currency. Money has literally moved across the planet, disintermediating correspondent banks and clearing houses and replacing them with a handful of blockchain confirmations,” he says.