Bank of America, the second-largest bank in the U.S., has approved the trading of bitcoin futures for some clients, according to two people with knowledge of the matter who spoke on condition of anonymity.
Like most institutions, the bank has been conservative in its approach to the crypto sector, but due to the large amount of margin required to trade the futures, it is now allowing some clients to access the crypto market, one of the sources said. Some clients are setting up to trade bitcoin futures, which are cash settled, and one or two may have already gone live, the other source said.
A number of investment banks are reportedly allowing clients to invest in crypto products. In March, Goldman Sachs confirmed plans to relaunch its cryptocurrency trading desk after a three-year hiatus, and in May, the investment bank started buying and selling bitcoin futures in block trades through Chicago Mercantile Exchange (CME) Group, using Cumberland DRW as its trading partner.
Having collected over $30 million in fees in the last week, a cute NFT pet game called Axie Infinity is currently raking in more protocol revenue than Ethereum and Bitcoin, and more than the next 11 top-ranking dapps — that is, Uniswap, PancakeSwap, Aave, Compound, SushiSwap, QuickSwap, MetaMask, Lido Finance, MakerDAO and Synthetix — combined. And in this case, its business model is designed so the people profiting from it are not just a bunch of crypto bros getting richer. It’s people farther down the food chain, those who are usually excluded from these kinds of life-changing moments of wealth creation.
With almost half a million daily active users (DAU) and an estimated 60% of those coming from the Philippines, Axie is exploding. To put this into perspective, around the end of July 2020, just before I first wrote about it, Axie’s DAU was below 500. But ever since the developing world got wind of this Pokémon-esque video game that pays to play, the product found its fit with a segment of the global population that hasn’t traditionally been a top priority for tech companies.
I’ve seen a few Twitter-based armchair critics label the pursuit of SLP, Axie’s battle reward token, as meaningless grinding. It’s understandable how they’d arrive at this conclusion, where people are familiar only with the exploitative business models of the traditional gaming industry and haven’t yet grasped how decentralized gaming is different. But it also reveals a lack of consideration for those who have found real value and purpose in these games. Many Axie players have been grinding much harder in their day jobs and getting much less for it.
To them, play-to-earn looks pretty good. So good, in fact, that I’ve heard a few murmurs that we might soon see increasing numbers of workers ditching their offline jobs to seek a career in the Metaverse instead. Here in the Philippines, it’s not hard to imagine how that could happen. It isn’t much of a departure from the usual narrative of the Filipino migrant worker.
“They nurse the sick in California, drive fuel trucks in Iraq, sail cargo ships through the Panama Canal and cruise ships through the Gulf of Alaska. They pour sake for Japanese salarymen and raise the children of Saudi businessmen,” wrote Richard C. Paddock in a 2006 LA Times article about the Philippines’ most successful export: its people.
Back in the 1970s, when the Philippines was suffering a political crisis and massive domestic unemployment, then-President Ferdinand Marcos came up with a new labor export policy involving the “active and systemic migration” of the nation’s people. It was meant only as a temporary solution, with the added benefit of consolidating foreign exchange with inbound remittances. Today, more than 10 million Filipinos live across the globe, with 2.2 million of those identified as Overseas Filipino Workers, or OFWs. The money they send home makes up almost 10% of national GDP, ranking the Philippines in the top four recipients of remittances globally, behind India, China and Mexico.
In early 2020, when the COVID-19 pandemic hit and OFWs were being laid off by the plane-load, the World Bank feared the value of remittances to low- and middle- income countries could slide by 20% or more, leaving vulnerable households in the lurch and putting a tremendous strain on government relief efforts. But that’s not how it has turned out. A recent central bank report shows the volume of remittances has actually exceeded pre-pandemic levels to hit $11 billion in the first quarter of 2021. That’s an all-time high.
But don’t jump to celebrate; this isn’t necessarily good news. Since March 2020, around 400,000 OFWs have been displaced due to pandemic-related job cuts. Without the reinstatement of those jobs, this tells us the remittance burden has simply intensified for those still gainfully employed overseas. Or, stranded OFWs are drawing down their savings to meet the deficit. Or, those repatriated may have brought back months if not years of savings in one lump sum, artificially boosting the income data.
Upon their return home, repatriated workers face uncertain employment prospects, forced to compete for jobs in a country that didn’t have enough work or good enough wages for them even before it entered its worst recession on record. This is a massive problem, not only for OFWs but their families, too, who rely on that money coming in. As such, there is now a huge need for the government to target employment generation and deliver policies encouraging OFWs to undergo retraining and learn new skills to protect their livelihoods.
But where will those jobs come from, especially for those low-skilled workers in the services sector who were cleaners, nannies, drivers, wait staff and so on, overseas? Or their countrymen who previously worked in any of the local industries that were decimated by COVID-19, such as tourism, hospitality, retail, transport and manufacturing? Left idle, it’s no surprise that more and more of these un- and under- employed are migrating to where the money is, the Metaverse.
In his Cryptoday newsletter, Luis Buenaventura, co-founder of BloomX, a central bank licensed crypto exchange that offers a direct trading pair between the Philippine peso and SLP, observed the following:
The average player can earn 4,500 $SLP a month, so if we assume that about a third of those Pinoy players are playing at the optimal level, they are collectively going to earn 222,750,000 $SLP this month. How much is $SLP in peso terms? Well, as of this week, it’s over 9 pesos each, which means that these kids are cumulatively going to be raking in around 2 BILLION PESOS this month. To put that into perspective: 2 billion pesos is the average amount of remittances that ALL the OFWs living in Hong Kong send back home to the Philippines each month.
Luis, a friend of mine in the CryptoPH scene, published this newsletter on July 9. Given Axie’s breakneck growth rate, the numbers are already superseded. So I caught up with Luis to brainstorm how long it might be before the value of inbound SLP rivals the Philippines’ largest source of international remittances, that is, the United States at roughly $10 billion per year.
Let’s be conservative and assume the average Axie player earns about 150 SLP daily. If SLP is trading at $0.20, and there are one million Filipino DAU, that would bring in US$10.8 billion annually. This is totally conceivable when you think of it as less than 1% user adoption in a country with a populace of 111 million, or if you think of it as a slice of the total revenue that could be generated by play-to-earn as a sector. NFT games are rapidly increasing in popularity, with more and more developers eyeing the Philippines as a highly marketable launchpad.
As such, the idea of becoming an MFW (Metaverse Filipino Worker) is emerging as an enticing alternative to being an OFW. The Metaverse is a career destination that can be reached with a smartphone and an internet connection as opposed to a bus, boat, train or plane. You can work from home and be your own boss! And, if you don’t have the required upfront capital to invest in the tools of the trade (that is, the NFTs that are the basis of all these games and virtual worlds), you can kick-start your income engine by renting someone else’s.
Further, for those who demonstrate exceptional dedication and skill, these Metaverse jobs offer the potential to climb the ladder, with many talented players moving quickly into leadership positions within the community.
This has hit a nerve, particularly in rural communities, because it represents a previously incomprehensible pathway to meaningful participation in the global digital economy.
If you remember Ijon Inton from the first article I wrote about Axie in the Philippines, he made a killing off crypto games during the pandemic lockdown. Even so, as soon as border restrictions relaxed and international flights started up again, Ijon went the OFW route and moved to Japan to become a trainee butcher. At the time, I asked if he’d considered staying home to play Axie instead. He said that even though being a full-time gamer would be a dream come true, his ultimate goal was to provide for his children. So, he did the sensible thing and bid goodbye to the Philippines.
This wouldn’t have been an easy decision to make. To get a sense of the sacrifice made by OFW parents, watch this heartbreaking TV commercial that reveals the tenuous relationship between an OFW mother and her young son, when she returns home to celebrate Christmas for the first time in years (yes, it’s an ad for dishwashing liquid, but I cry every damn time I watch it).
But just last month, barely a year since he left home, Ijon decided to quit his traineeship after realizing he’d earned more in three months of playing Axie, renting his Axie NFTs out to other players and trading crypto, than he would’ve made working three years full time as an OFW. So now, Ijon is heading back home to his family. For good.
Upon receiving his resignation, Ijon’s employer happily granted him early release from his contract and hastily ushered him onto the first available flight back to the Philippines. Ijon told me he got the feeling the company wanted him out of there ASAP because they were worried he might inspire other workers to opt out of their roles, too. Ijon had already helped at least 20 of his colleagues start earning with Axie, so his employer probably had good reason to be concerned.
Metaverse careers are gaining serious legitimacy, and those who still laugh at the notion of a job inside a videogame do so at their own peril. Some, like Ijon and this guy, have earned enough to quit their OFW job and come home. I’ve heard other stories about OFWs in Kuwait who earn more playing Axie during their downtime than they do working their day jobs, so they send SLP home in order to avoid the expensive remittance fees charged on cash transfers. And then there’s Lola and Lolo, the elderly couple from the Play-to-Earn documentary, who have completely subverted the OFW model. They now earn enough to meet their own needs with money leftover to support their OFW daughter who recently lost her job in Canada.
As Paddock observed about the plight of the OFW, millions of Filipino children are growing up without their mothers and fathers, yet they have money to buy plenty of computer games. So what if this new breed of computer game could bring their mother and father home forever?
Ultimately, if more Filipinos were able to stay in their home country, this would increase the supply of local labor. Working full time in the Metaverse is still a pipe dream for most. Even those who call themselves full-time, play-to-earn gamers usually have another side hustle or two on the go. It is perfectly possible to balance NFT gaming with other employment because the work is fully flexible and can be done anywhere, anytime.
This is an intriguing proposition because Filipinos do not strive merely to put food on the table. They want to be able to save for their family’s future and invest in their children’s education. Ideally, they’d have multiple income streams like a local job that pays the bills, then what they make in the Metaverse is extra. And when they make more money, Filipinos will also have more disposable income, which will drive domestic demand for services and grease the wheels of consumer spending. Perhaps then it will be all the rich NFT gamers who employ the cleaners, nannies, drivers and wait staff in their home country. They’ll pay their providers better, too; if not for the spirit of bayanihan, then for the fact that no worker will be incentivized to do those service sector jobs if they know they could be earning more in the Metaverse.
The Philippines has long been a major supplier of labor to the world. But the significant revenue generated by OFWs over previous decades is potentially unsustainable. Remittances have been a vital economic crutch for developing nations but they’ve also reduced local labour supply and induced a culture of dependence. Additionally, those who must leave their families behind in search of a better future are forced to pay a huge emotional tax. And as we enter the post-coronavirus era, digital transformation is reducing the need for human help and eliminating some jobs altogether. So the workers need something else to do.
It’s early days, but play-to-earn could offer a way forward. The Metaverse is cross-border by nature, so people don’t need to be.
The El Salvador government has plans to launch a native cryptocurrency that consumers will be able to use for services, Latin American digital newspaper El Faro reported Friday night.
Ibrajim and Yusef Bukele, the brothers of the country’s president, Nayib Bukele, told prospective investors that the cryptocurrency, which is currently referenced as the Colon dollar, would be introduced by the end of 2021, according to the report, which cited video recordings of the brothers discussing the proposal with these investors.
The brothers said that they represented the president, according to the report, which was also based on documents that El Faro had obtained. The news comes weeks after the Central American country’s government overwhelmingly approved the president’s bitcoin law, which will treat the original cryptocurrency as legal tender and require all businesses to accept it as payment for goods and services by September.
A spokesperson for the El Salvador government told El Faro that the plan was “discarded” but the newspaper, citing an unidentified source, said the plans are currently on track.
The president’s brothers reportedly met with representatives from Cardano, WhizGrid and Algorand at different times, according to the paper.