Filipino workers who are living in Canada and Vietnam have a new way of passing remittances, one that leverages bitcoin’s Lightning Network.
Neutronpay, a Canada-based digital payments platform, has announced a partnership with Pouch.ph to provide fast, cost-effective cross-border payments from Filipinos living abroad to family members back home.
“This is a long overdue partnership between Neutronpay and Pouch, and I am very excited and pleased to share we now have the ability for the Filipino community in Canada and Vietnam to remit home faster, better, and cheaper than traditional banking rails,” Albert Buu, Neutronpay’s founder and CEO, said in a prepared statement. “With the Lightning Network, families can now send more of their hard-earned money home instantly to the Philippines rather than losing a large portion to high fees with regular banking methods today.”p
How the Arrangement Works
Through the Neutronpay-Pouch partnership, originating funds—either the Canadian dollar or the Vietnamese dong, depending on where the Filipino expat is located—are converted into bitcoin through the Lightning Network, then output to the recipient in the Philippines in the form of the Filipino peso.
Javelin Strategy & Research
Remittances are a major force in the Filipino economy. The country’s central bank reported in February that cash remittances hit $36.14 billion in 2022, a rise of 3.6%. The total was 8.9% of the country’s gross domestic product.
Overseas foreign workers—OFWs—from the Philippines numbered 1.8 million in 2020, according to research by Statista.
“For the longest time, overseas Filipinos had limited options when it came to sending money back home, relying mainly on traditional banks and money transfer agents that could be both inconvenient and costly,” Ethan Rose, CEO of Pouch, said in the Neutronpay release. “Working with Neutronpay is consistent with our endeavor to empower OFWs to easily send money to their families and loved ones.”
Expanding the Role of Cryptocurrencies
Joel Hugentobler, an analyst in the Javelin Strategy & Research Cryptocurrency practice, noted that the technology used in the Neutronpay-Pouch partnership represents yet another way cryptocurrencies have expanded the field of payments for consumers.
“The continuing increase in interest for people to use the Lightning Network to transfer fiat currencies further strengthens bitcoin as it becomes a more liquid asset that trades in an increased number of currencies,” he said. “This method of payments using the Lightning Network separates the payment attribute from bitcoin the volatile asset.”
Hugentobler also drew a contrast between such advancements in the rest of the world and the current regulatory stance of the United States.
“Countries that remain open and neutral to cryptocurrencies have seen and will continue to see the benefits, such as cheaper payments that are near-instantaneous, and remittances,” he said. “The United States benefited greatly from the internet boom and the following decades because the government introduced a neutral regulatory framework that encouraged innovation. Unless they use a similar approach to the digital asset ecosystem, other countries will continue to greatly benefit, particularly in times of higher rates and fiat currency debasement.”