Tech
What Crash? Cryptocurrencies Roar Back in the Philippines.
On a recent Tuesday night, about 20 people crowded onto the second floor of Joniel Bon’s new internet café in Quezon City, 10 miles from Manila. Sitting at computers with 34-inch curved monitors, they began playing video games like Heroes of Mavia and Nifty Island, while music by Taylor Swift and Maroon 5 blasted from the speakers.
Playing these games can be a full-time job, and some of Mr. Bon’s customers had settled in for the night with slices of pizza to fuel themselves. Games reward players with cryptocurrency tokens to complete small daily challenges. Often, players convert their tokens into pesos, the country’s currency, earning about double the Philippine minimum wage of $11 a day.
Mr Bon, 40, had dreamed of the buzz of activity in his next business cryptocurrencies have collapsed spectacularly two years ago, dashing his hopes of a thriving gaming collective at the time.
“There was a point where I had to say, ‘I believe in this.’ I had to hope,” said Mr. Bon, a former computer worker. “We survived.”
Mr Bon’s new internet cafe is a sign of how cryptocurrency has begun to thrive again in the Philippines, which has long been a hub of crypto activity. This month, Bitcoin caught up a recordcapping the comeback from the 2022 market crash and bringing with it other digital currencies like Ether. Bitcoin was trading around $67,000 on Monday.
New billboards for cryptocurrency companies have popped up around Manila. People have started harvesting virtual crops from a crypto-farming game called Pixels as a new source of income. Overseas Filipino workers, known as OFWs, are also returning to the country to earn cryptocurrencies as MFWs, or Metaverse Filipino Workers.
According to data from research firm Chainalysis, the value of crypto transactions in the Philippines increased by 70% in November and December compared to September and October, reaching $7.3 billion.
According to the game’s developers, Pixel’s Filipino player base rose to over 830,000 in March from 80,000 in November. About 30% of the world’s gamers who make money from cryptocurrencies are based in the Philippines, they said.
The renewed activity has given some Philippine officials pause. At a cryptocurrency conference in Manila in November, Kelvin Lee, then commissioner at the country’s Securities and Exchange Commission, said the government was grappling with how to regulate the technology as it regained popularity.
Cryptocurrencies have been at the center of fraud and scams in the past. The tokens that crypto-earnings games give out are more volatile than Bitcoin and Ether, meaning the boom could bust again.
“We want a safe space to operate well in,” Mr. Lee said, while acknowledging that a robust crypto industry could help the Philippines, which relies heavily on outsourced customer service and information technology jobs. “How can you operate well if the industry itself, if the space itself, seems unruly, unwieldy, lawless?”
Mr. Lee, who left the commission this month, declined an interview request. Last month, the Philippine central bank he told local media which planned to launch its own digital currency within the next two years.
Cryptocurrencies have become particularly popular in the Philippines during the pandemic lockdown. While more than 40 percent of the country’s population He doesn’t have a bank accountTHE majority of Filipino families have access to the Internet, which has allowed cryptocurrency to spread to rural areas.
At the time of the lockdown, people started playing the video game to earn cryptocurrencies Axie Infinitemade by a Vietnamese company, Sky Mavis. In the game, players battle Pokemon-like characters to earn a cryptocurrency called Smooth Love Potion.
At the height of Axie’s popularity in 2021, Smooth Love Potion was accepted by property owners, gas stations, and some restaurants in the Philippines as an alternative to pesos.
But when cryptocurrencies crashed a year later, thousands of Filipinos lost their savings in Smooth Love Potion. The game’s characters, which some players would trade to sell for thousands of dollars – so valuable that some Filipinos took out loans to buy them – have become useless.
“The game worked well when everyone joined,” said Ian Dela Cruz, 30, a farmer from Pampanga, a province north of Manila, and a former Axie player. “But when everyone tried to get out, that’s when everything stopped.”
Some Filipinos who have successfully made money through Axie have become entrepreneurs, building their own companies and gaming collectives called “guilds.” Now some of these endeavors are taking off.
Teresa Pia, 27, a former Axie player, left her job as a preschool teacher in 2021 to run a cryptocurrency gaming guild called Real Deal, which has 54,000 members on the social media platform Discord. Ms. Pia said she saw her Discord channel “as a new classroom” in which she taught members, many of them Filipino women working abroad, to trade and invest in cryptocurrencies. With the recovery of cryptocurrencies, many of these women are now earning enough money to return home to their families, she said.
“The amount of money they receive may seem small, but when you convert it into pesos, it’s big for them,” Ms. Pia said.
Dela Cruz has stayed in the cryptocurrency industry as a video game streamer on Twitch, the Amazon-owned streaming platform. He is now the captain of one of the biggest e-sports teams in the Philippines. In Pampanga, many farmers have started playing Pixel and are harvesting virtual crops to earn cryptocurrency as a side income, he said.
Luke Barwikowski, the game’s American founder, said Filipino farmers gave him advice on how to make the pixels more realistic.
“We have users who literally give us their growing schedules or their watering routines,” he said.
Even by crypto standards, the industry in the Philippines is rife with opportunists. Filipino phishing scams are rampant in online crypto communities on platforms like Discord and X, as is “pig slaughter,” in which scammers target victims with deceptive texts and Facebook messages. During Axie’s heyday, some guild leaders exploited vulnerable players, taking up to half of their earnings as membership fees, former players said.
Mr. Bon said that in addition to providing his guild members with computers and resources, he views his job as that of a protector. “This is family,” he said.
While cryptocurrencies have been a boon to many Filipinos, some said they would be okay with moving on to other opportunities if the industry failed again. Mr Dela Cruz said he dreamed of running multiple farms with his brothers and not having to rely on cryptocurrencies for his income.
“The fresh air, the sounds of the chickens,” she said. “You don’t find that online.”