As the saying goes: “Rome wasn’t built in a day.” The same is true about the overall bitcoin eco-system and several factors come into play in the building of the eco-system in the Philippines.

Infrastructure

As counter-intuitive as it may sound, the physical infrastructure of the Bitcoin must be developed and built in order for bitcoin to go mainstream. Particularly in developing countries where people do not have bank accounts to automatically fund their bitcoin transactions, cash-in / cash-out infrastructure is a must. This ‘infrastructure’ can come in the form of bitcoin ATMS or banks and pawn shops that partner with bitcoin service providers to accept or dispense cash for bitcoin. Companies such as Palarin, Bitmarket.ph and coins.ph are building bitcoin infrastructure to make the technology more accessible to the masses.

Price Stabilization

While volatility can be a boon for speculative investors, it can also be a bane for everyday Filipino consumers. To-date, bitcoin prices have been relatively volatile when compared to conventional indices such as the S&P 500. The magnitude of bitcoin volatility typically scares away mainstream users who do not want to be exposed to the currency exchange risk. From this perspective it becomes less practical for your everyday consumer to use bitcoin as a mechanism to hold and preserve value and even use it as a payment method.

Regulation

Whether we like or not, regulation will continue to play a critical role in the adoption of bitcoin by mainstream users. Just as with Goldilocks and the three bears, regulation needs to be ‘just right.’ On one end of the spectrum, the government can chose to stifle innovation and quell new bitcoin companies by force fitting the technology into archaic regulatory frameworks never intended to apply to something like bitcoin. On the other end, under-regulation could have counter-productive implications. Without proper ‘guard rails’, bitcoin could be used primarily for illicit activities perpetuating the stigma that bitcoin is not suitable for regular law-abiding citizens. So far, governing bodies in the Philippines have been relatively lenient with the Bankgo Sentral Pilipinas issuing a consumer warning regarding the digital currency.