The Bootstrapper’s Guide To Bitcoin Remittances

There’s a lot of rhetoric about bitcoin and its impact on the $430 billion international remittance industry. One of the cryptocurrency’s most obvious uses is, after all, sending money across the planet with roughly the same effort as sending an email.
The potential effect on emerging markets – savings in aggregate that are larger than most countries’ education budgets – cannot be overstated. But beyond all the pontificating there is still the practical implementation that has yet to be sorted out.
The numbers
Our startup is a homespun company operating out of the Philippines, which is the third-largest receiver of remittances in the world. The numbers are compelling: $26 billion received in 2013, an estimated $27.5 billion in 2014, and consistent growth of about $1 billion to $2 billion annually. Mexico is right behind with $23 billion received in 2013, although it has beendeclining in volume since the US housing market crash several years ago.
Although similar in volume, Mexico and the Philippines couldn’t be more different from a remittance standpoint. The United States is the single-largest source of remittances for both countries, but for Mexico it accounts for 98 percent of the total volume, whereas with the Philippines it accounts for a little over 30 percent.
A closer inspection also seems to indicate that the nearly US$10 billion in volume from the Philippines being attributed to the U. S. isn’t coming from the U. S. at all. In reality, a significant (although hitherto unknown) amount is simply funds being routed via nostro bank accounts from the Middle East, which hosts over 2.5 million Filipinos. Additionally, there are 40 other countries currently hosting at least 10,000 Filipinos respectively, an international pageantry which also includes Canada, Malaysia, Australia, Japan and the United Kingdom.
It’s accurate to say then that Mexico relies on a singular remittance corridor with the United States, while the Philippines is dependent upon multiple corridors with multiple countries, a circumstance which more closely echoes the two largest remittance countries, India and China ($71 billion and $64 billion, respectively).

This post was published at Tech Crunch on Jan 30, 2015.