14 | FORBES ASIA MAY 2017E
xperts at the International Mon-
etary Fund suggested last year
that virtual currencies (VCs)
could promote financial inclu-
sion. Along with the standard
cautions about possible money laundering,
terrorism and other nefarious purposes, the
IMF noted, “VCs offer many potential ben-
efits, including greater speed and efficiency
in making payments and transfer–particu-
larly across borders... .”
The cross-border benefits have led to the
launch of Bitcoin startups in places like the
Philippines, where remittances from over-
seas Filipino workers contribute more than
$26 billion to the economy. One example is
Coins, a mobile-first, blockchain-based plat-
form that facilitates remittances, bill pay-
ments and mobile airtime top-ups.
“I was initially looking for a way to solve
the issue of expensive cross-border pay-
ments, which led me to blockchain technol-
ogies and how they could be used to pro-
vide widespread financial access in general,”
says Justin Leow, head of business opera-
tions for Coins in Metro Manila.
Coins was founded in 2014 by Ron
Hose, like Leow a Cornell grad, and Runar
Petursson. Since then, it has signed up half a
million users and partnered with retail out-
lets, banks and others to create a distribu-
tion network of 22,000 cash disbursementand collection locations in the Philippines.
In late 2016, the company raised $5 million
in a Series A funding round.
Leow says Coins has been able to lower
remittance costs from 7% to 8% to about 2%
to 3% for its customers, including those who
use it for bill-paying and remittances, as well
as merchants and service providers who ac-
cept bitcoin. The company’s ultimate goal is
“to increase financial inclusion by delivering
financial services directly to people through
their mobile phones.”
Experts see remittances as an area that
could be ripe for VC disruption. The Phil-
ippines is not the only country with a high
population of overseas workers whose fam-
ilies depend on their remittances. High
transaction fees and slow or inconvenient
transfer services create extreme hardships
on people who can’t afford to spend hours
claiming one payment, or who live far from
banks or shops that manage remittance
payments.
“The costs of these transactions, which
can average as high as 12% in sub-Saharan
Africa, hit the poor the hardest. Technolog-
ical advances like cryptocurrency and dis-
tributed ledgers may offer a solution,” Gar-
rick Hileman, a cryptocurrency researcher
at the Cambridge Centre for Alternative Fi-
nance, told Phys.org, a science site. “It would
be surprising to me if in 30 years from nowwe aren’t looking back and saying, yes, this
was a watershed moment for financial in-
clusion, and that cryptocurrency and dis-
tributed ledgers played a significant role in
opening up access to the financial system in
developing economies.”
A 2016 KPMG article indicated that
more than 70% of the population in South-
east Asia is unbanked, leaving hundreds of
millions at steep disadvantages for achiev-
ing financial security. But fintech companies
see mobile technology as a means of clos-
ing that gap.
“One of the important ways to increase
financial inclusion is facilitating the transi-
tion from people being purely cash-based to
[being] able to access and use [their] money
online. In this regard, cryptocurrencies
work very well as railways for seamless fund
transfers and being able to pay for servic-
es,” Leow of Coins says. “The advantage that
cryptocurrencies provide relative to other
closed-loop systems is that anyone can be
connected to the payment network very
easily and services can be made available to
anyone else on the network.”
Remittances and mobile payments
aren’t the only ways blockchain technolo-
gy facilitates inclusion. Business processes
are another cost sink. So, for instance, Acu-
deen, a Filipino fintech startup, helps small
businesses streamline invoicing by usingFORBES ASIA
NEW MONEYBITCOIN TO THE
MASSES
Fintech is giving ‘VC’ an added meaning where startups
shave the cost of remittances.BY CASEY HYNES