A Philippines bitcoin startup, Coins, recently announced a $5 million investment from global investors, to help it expand its reach to underbanked communities in Southeast Asia. The Series A round is a big shot in the arm to the fledgling company as it seeks to expand its reach throughout Southeast Asia and beyond to reach as many as 600 million customers. It opens the door for many individuals who lack access to typical banking services to use bitcoin as their main means of currency,without the volatility that is typical of the digital currency through various partnerships with banks and other large “financial institutions, and last-mile retail outlets, spanning a network of over 22,000 cash disbursement and collection locations in the Philippines alone.”
The company was conceived as a “mobile-first, branchless, blockchain-based platform that provides consumers with direct access to basic financial services such as remittances, bill payments, and mobile airtime.” A quick trip to Coins’ website shows that one can pay use Coins’ app to load a phone with more minutes, pay bills, friends, and vendors, in addition to cash withdrawal from bank ATMs. The innovative start-up has created a mobile platform that uses the blockchain as a “transfer protocol” so that users can use bitcoin to withdraw cash from bank ATMs through SMS codes, not debit cards, provides door-to-door cash delivery, offers service at local convenience store chains, and gives them the option to keep their bitcoin in Philipine pesos rather than bitcoin currency. This provides a welcome lack of volatility to users who can least afford it, and makes them more likely to use the platform.
The $5 million investment, led by Accion Frontier Inclusion Fund, will only expand these efforts. Accion is a fund that is dedicated to supporting start-ups for the underserved that promote “financial inclusion.” With more than 60% of Southeast Asia’s population being unbanked, the expansion opportunity and upside are tremendous. The press release noted that “leveraging the blockchain has enabled Coins to connect its services to partners with a presence in over 40 countries, and offer instant, low-cost settlement of cross-border payments and remittances. For overseas workers who are currently paying 6-8% to send funds through companies like Western Union, this means a savings of up to 80% in fees.” Reducing cross-border fees on this scale while removing the volatility of bitcoin could provide both bitcoin and the underbanked and unbanked with a huge opportunity, and leave other more typical currencies and banking institutions with steep competition.
Indeed, it may prove that one of the best opportunities for the digital currency market to expand is targeting underbanked and unbanked communities who see bitcoin as a means to avoid the traditional banking industry entirely.