The paradise of crypto gaming, the Philippines is making a comeback

Original Title: What Meltdown? Crypto Comes Roaring Back in the Philippines.

By: Eli Tan, The New York Times

Translated by: Luffy, Foresight News

On a recent Tuesday night, about 20 people packed the second floor of Joniel Bon's newly opened internet café in Quezon City, 10 miles from Manila, Philippines. They sat in front of computers equipped with 34-inch curved monitors, playing video games like "Heroes of Mavia" and "Nifty Island," while music from Taylor Swift and Maroon 5 filled the speakers.

Playing these games can become a full-time job, and some of Bon's customers have settled in with slices of pizza to recharge. These games reward players with cryptocurrency tokens for completing daily small challenges. Typically, players exchange their tokens for the local currency, the peso, earning about twice the daily minimum wage of $11 in the Philippines.

A man walks past a building with a small sign that reads "NFT X STREET," the name of an internet café

After a significant drop in the cryptocurrency market two years ago, 40-year-old Bon, who had dreamed of a thriving business, saw his hopes for the gaming community's development dashed.

"I have to say, 'I believe in this.' I have to hold on to hope," said Bon, a former IT worker. "We survived."

Bon's new internet café marks the resurgence of cryptocurrency in the Philippines, which has long been a hub for cryptocurrency activity. This month, Bitcoin reached an all-time high, recovering from the market crash in 2022 and driving up other cryptocurrencies like Ethereum.

New billboards for cryptocurrency companies have appeared throughout Manila. People have started harvesting virtual crops from a cryptocurrency game called Pixels as a new source of income. Overseas Filipino workers, known as OFWs, are also returning to the country to earn cryptocurrency, now identifying as MFWs (metaverse Filipino workers).

Players in the internet café check their cryptocurrency wallets on their phones

The internet café is decorated with anime characters

According to data from research firm Chainalysis, the value of cryptocurrency transactions in the Philippines grew by 70% in November and December compared to September and October, reaching $7.3 billion.

The developer of the cryptocurrency game Pixels reported that the number of Filipino players surged from 80,000 in November last year to over 830,000 in March. They stated that about 30% of cryptocurrency video game players worldwide come from the Philippines.

Joniel Bon stands with a group of people watching others play video games

The revival of crypto gaming activities has left some Philippine officials hesitant. At a cryptocurrency conference in Manila in November, Kelvin Lee, then a commissioner of the country's Securities and Exchange Commission, stated that as the technology becomes popular again, the government is working to address how to regulate it.

In the past, cryptocurrency has been at the center of fraud and scams. The tokens issued by cryptocurrency games are often more volatile than Bitcoin and Ethereum, meaning the boom could burst again.

"We want to have a safe space to operate well," Lee said, while acknowledging that a strong cryptocurrency industry could help the Philippines, which heavily relies on outsourced customer service and IT jobs. "If the industry itself looks unruly, hard to operate, and illegal, how can you operate well?"

Lee, who left the Securities and Exchange Commission this month, declined interview requests. Last month, the Philippine central bank told local media that it plans to issue its own digital currency within the next two years.

During the COVID lockdowns, cryptocurrency became particularly popular in the Philippines. While more than 40% of the population lacks bank accounts, most Filipino households have access to the internet, allowing cryptocurrency to spread to wide rural areas.

During the lockdowns, people began playing the cryptocurrency video game Axie Infinity, created by the Vietnamese company Sky Mavis. In the game, players battle Pokémon-like characters to earn a cryptocurrency called "Smooth Love Potion (SLP)."

People playing Axie Infinity, a cryptocurrency earning video game that became popular in the Philippines during the pandemic lockdowns

At its peak popularity in 2021, SLP was accepted by landlords, gas stations, and some restaurants in the Philippines as an alternative to pesos.

But a year later, when the cryptocurrency market crashed, thousands of Filipinos lost their savings held in SLP. Game characters that some players bought for thousands of dollars (so expensive that some Filipinos needed loans to purchase them) became worthless.

"When everyone was involved, the game looked great," said Ian Dela Cruz, 30, a farmer from Pampanga province in northern Manila and a former Axie player. "But when everyone tried to exit, the game was over."

Former Axie player Ian Dela Cruz remains in the crypto industry as a video game streamer on Twitch

Some Filipinos who successfully made money through Axie became entrepreneurs, establishing their own companies and gaming teams known as "guilds."

Teresa Pia, 27, a former Axie player, quit her job as a preschool teacher in 2021 to run a cryptocurrency gaming guild called Real Deal, which has 54,000 members on the social media platform Discord. Pia said she views her Discord channel as "a new classroom," where she teaches members (many of whom are Filipino women working abroad) about cryptocurrency trading and investing. She noted that with the resurgence of cryptocurrency, many women have now earned enough money to return home and reunite with their families.

Teresa Pia, a former preschool teacher, teaches members of her Discord channel how to trade and invest in cryptocurrency

"The money they receive may seem small, but when converted to pesos, it's a significant wealth for them," Pia said.

Dela Cruz remains in the crypto industry and is now a video game streamer on Amazon's Twitch platform. He is currently the captain of one of the largest esports teams in the Philippines. He mentioned that many farmers in Pampanga province have started playing Pixels and harvesting virtual crops to earn cryptocurrency as extra income.

The game's American founder, Luke Barwikowski, said that Filipino farmers have provided him with suggestions on how to make Pixels more realistic.

"Some users directly provide us with their crop schedules or irrigation habits," he said.

Even by cryptocurrency industry standards, the Philippines is filled with opportunists. Phishing scams targeting the cryptocurrency community are rampant on platforms like Discord and X, with scammers targeting victims through deceptive texts and Facebook messages. Former Axie players reported that during Axie's heyday, some guild leaders exploited vulnerable players, taking half of their earnings as membership fees.

Bon said that in addition to providing computers and resources for guild members, he sees his role as a protector.

Many farmers from the Dela Cruz family farm in Pampanga province have started playing the video game Pixels and harvesting virtual crops to earn cryptocurrency as extra income

While cryptocurrency is a boon for many Filipinos, some express that if the industry fails again, they can turn to other sectors. Dela Cruz dreams of managing more farms with his brothers without relying on cryptocurrency for income.

"Fresh air, the sound of chickens," he said, "that's something you can't find online."