To promote USDC-denominated remittances in the Philippines, local fintech entity Coins.ph has forged a strategic alliance with Circle, the creator of the USDC stablecoin. The agenda behind this partnership is to cultivate a broader adoption of cryptocurrency remittances via the stablecoin among the 18 million Filipinos utilizing Coins.ph. The Philippines currently ranks as the fourth largest global hub for remittances, setting the stage for a significant transformation through this partnership.
Jeremy Allaire, Circle’s co-founder and CEO, elaborated on the expansive commercial partnership via a post on X. He expressed that through this joint venture with Coins.ph, Circle aspires to extend USDC distribution and remittances to the 18 million Filipino users, further unlocking digital dollars and low-cost, instant dollar remittance in emerging markets.
Tackling remittance hurdles, eyeing financial inclusion
Coins.ph, recognized as a cryptocurrency exchange and wallet provider, anticipates that this collaboration will not only furnish secure cross-border remittances but also deliver them at a lower cost and near-instant pace. USDC, being a fiat-backed stablecoin, presents a 1:1 redeemable value for US dollars, which stands as a reliable alternative for remittances.
In 2022, the remittance inflow in the Philippines peaked at an astonishing $36.1 billion, as documented by the Philippines central bank Bangko Sentral Ng Pilipinas. Despite the role of these transfers in propelling the country’s economic growth, the traditional channels have been marred by enormous fees and transaction delays.
For instance, a recent dossier from the World Bank depicted that the average remittance fee through conventional channels was approximately $200, translating to roughly 5.7% in 2022. This partnership aims to substantially slash these costs, aligning with the United Nations’ goal of reducing migrant remittances costs to 3% or lower.
Moreover, the initiative envisions bringing financial inclusivity to a broader spectrum of the population. A noteworthy 44% of the Philippine adult populace remains unbanked, and this venture could serve as a beacon of financial emancipation for them.
Raagulan Pathy, Circle’s VP for Asia Pacific, articulated the partnership’s alignment with the United Nations’ Sustainable Development Goal of curbing the transaction cost of migrant remittances to less than 3 percent by 2023. He emphasized that this collaboration is a pivotal step towards amplifying economic opportunity and prosperity in the Philippines.
The effect of this partnership is bound to extend beyond the shores of the Philippines. With a shared objective of remolding the financial framework, Coins.ph and Circle are not only addressing the immediate remittance hurdles but are also laying a robust foundation for an inclusive financial ecosystem. The alliance underscores a forward-thinking approach, leveraging digital currencies to drive a real-world impact, thereby nurturing a financially inclusive environment for the unbanked population, not only in the Philippines but potentially setting a precedent for other emerging markets globally.
