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What collapse? Cryptocurrencies are making a strong comeback in the Philippines.| GuyWhoKnowsThings


On a recent Tuesday night, around 20 people crowded onto the second floor of Joniel Bon's newly opened Internet cafe in Quezon City, 16 kilometers from Manila. Sitting in front of computers with 34-inch curved monitors, they began playing video games like Heroes of Mavia and Nifty Island, while music from Taylor Swift and Maroon 5 hummed from the speakers.

Playing these games can be a full-time job, and some of Bon's customers had settled in for the night with slices of pizza to fuel them. The games reward players with cryptocurrency tokens to complete small daily challenges. Players often convert their chips to pesos, the country's currency, earning about twice the Philippine minimum wage of $11 a day.

Bon, 40, had dreamed of the bustle of activity in his own business after Cryptocurrencies plummeted spectacularly two years ago, dashing their hopes for a thriving gaming collective at the time.

“There was a point where I had to say, 'I believe in this.' I was hopeful,” said Bon, a former information technology worker. “We survived.”

Mr. Bon's new internet cafe is a sign of how cryptocurrencies have begun to flourish again in the Philippines, which has long been a hub of crypto activity. This month, Bitcoin reached a record, capping a recovery from the 2022 market crisis and bringing with it other digital currencies like Ether. On Sunday, Bitcoin was trading at around $68,000.

Now new billboards for crypto companies have appeared in Manila. People have started harvesting virtual crops from a cryptocurrency 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.

In November and December, the value of crypto transactions in the Philippines increased 70 percent from September and October, to $7.3 billion, according to data from research firm Chainalysis.

Pixels' Filipino player base grew to more than 830,000 in March from 80,000 players in November, according to the game's developers. About 30 percent of the world's cryptocurrency-earning video games are based in the Philippines, they said.

The renewed activity has given some Filipino officials pause. At a cryptocurrency conference in Manila in November, Kelvin Lee, then commissioner of the country's Securities and Exchange Commission, said the government was struggling with how to regulate the technology as it regained popularity.

Cryptocurrencies have been in the center of fraud and scams in the past. The tokens handed out by cryptocurrency games are more volatile than Bitcoin and Ether, meaning the boom could break out again.

“We want a safe space to operate well,” Lee said, while acknowledging that a strong 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 and illegal?”

Lee, who left the commission this month, declined an interview request. Last month, the Philippine central bank told local media which planned to launch its own digital currency in the next two years.

Cryptocurrencies became especially popular in the Philippines during the pandemic lockdowns. While more than 40 percent of the country's population does not have a bank accounthe most Filipino households They have access to the Internet, which has allowed cryptocurrencies to spread to rural areas.

At the time of confinements, people started playing the video game to earn cryptocurrencies. infinite axiemade by a Vietnamese company, Sky Mavis. In the game, players battle Pokémon-like characters to earn a cryptocurrency called Smooth Love Potion.

At the peak of Axie's popularity in 2021, owners, gas stations, and some restaurants in the Philippines accepted Smooth Love Potion as an alternative to pesos.

But when cryptocurrencies crashed a year later, thousands of Filipinos lost the savings they had in Smooth Love Potion. The game characters, which some players would trade to sell for thousands of dollars. (so valuable that some Filipinos took out loans to buy them) lost their value.

“The game worked well when everyone was coming in,” said Ian Dela Cruz, 30, a farmer from Pampanga, a province north of Manila, and a former Axie player. “But when everyone tried to leave, that's when everything stopped.”

Some Filipinos who successfully made money through Axie became entrepreneurs and created their own companies and gaming collectives called “guilds.” Now some of those efforts are taking off.

Teresa Pia, 27, a former Axie player, left her job as a preschool teacher in 2021 to run a crypto 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 class” where she taught her members, many of them Filipino women working abroad, how to trade and invest in cryptocurrencies. As cryptocurrencies recover, many of those women are now making enough money to return home to their families, she said.

“The amount of money they receive may seem small, but when converted to pesos, it is big for them,” Ms. Pia said.

Dela Cruz remained in the crypto industry as a video game streamer on Twitch, the Amazon-owned streaming platform. He is now the captain of one of the biggest esports teams in the Philippines. In Pampanga, many farmers have started playing Pixels and are harvesting virtual crops to earn cryptocurrency as additional income, he said.

Luke Barwikowski, the game's American founder, said Filipino farmers had given him advice on how to make the pixels more realistic.

“There are users who literally give us their growing schedules or their irrigation routines,” he said.

Even by crypto standards, the industry in the Philippines is full of opportunists. Filipino phishing scams are widespread in online crypto communities on platforms like Discord and During Axie's heyday, some guild leaders exploited vulnerable players, taking up to half of their earnings as membership fees, former players said.

Bon said that in addition to providing computers and resources to his guild members, he considered his job to be that of protector. “That's family,” she said.

While cryptocurrencies have been a boon to many Filipinos, some said they were okay with moving on to other opportunities if the industry failed again. Dela Cruz said she dreamed of running more farms with her siblings and not having to rely on cryptocurrencies for income.

“The fresh air, the sounds of the chickens,” he said. “You don't get that online.”


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