Is Bitcoin the future of remittances?

By CCTV correspondent Barnaby Lo

The Philippines is famous for its workers who go overseas and send back money to their families. Now a new Bitcoin exchange website aims to tap the country's multi-billion dollar market for remittances.

As a security guard for a private residential compound in Manila, Johnny Drilon earns a little over 200 U.S. dollars a month. He keeps about 20 to 30 dollars for himself and sends as much as he can to his wife and four children in the provinces.

"I try to make do with whatever I've got left. Sometimes I literally have nothing to spend. It's a sacrifice," Drilon said.

Sending money also costs money: two dollars for the 55 dollars Johnny is sending this time. While Johnny says it's the lowest fee among local couriers, he'd rather pay less and send more money to his family.

"To us, it's quite a significant amount. My wife could be using the money for her fare to the city to pick up the money I'm sending," he said.

Bitcoin entrepreneur, Sam Kaddoura, believes his digital currency can help people like Johnny.

"So as soon as that Bitcoin that originated from Saudi Arabia hits our wallet here, we will then liquidate it into pesos, deposit it into whatever bank account. It's virtually nothing to transfer Bitcoin across the Internet," Kaddoura said.

The potential for Bitcoin banking here is enormous. According to the latest available data, the Filipino market for remittances, or money transfers, is the third largest in the world after India and China.

Online banking has become quite common in many countries, not so much here in the Philippines, but the Internet has definitely made it easier for millions of Filipinos working abroad and locally in major cities to send money. Now using the online currency Bitcoin is just the newest way to do this.

Going digital may be a solution for Filipinos who learn to trust the technology. Sam says he's aware of the need to educate consumers here, but as millions of Filipinos continue to transfer money to the Philippines and within its borders, Kaddoura says the Bitcoin alternative is an opportunity that Filipinos can't afford to miss.

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