The volume of bitcoin transactions in the Philippines has risen 362 percent on year to almost 20 million in the first half of 2021, up 71 percent, according to data from the Bangko Sentral ng Pilipinas.

The increase was because many Filipinos wanted to keep their money safe and secure while it was still growing and in difficult economic circumstances caused by the epidemic.

Although the absence of regulation and taxation did not deter Filipinos from dealing with virtual assets, the volatility of cryptocurrencies proved to be a stumbling block.

Amid the coronavirus epidemic, Axie Infinity became popular across the country owing to its status as a play-to-earn game. Its popularity reached new heights last year when 40 percent of players were said to be from the Philippines.

Pang Xue Kai, the co-founder of Indonesia-based cryptocurrency exchange Tokocrypto, said he thinks one of the interesting phenomena or trends is the play-to-earn phenomenon that has grown in the Philippines has now become the role model for the play-to-earn concept.

But the success of Axie Infinity has had a downside. The game's popularity, as well as a developing digital economy, prompted lawmakers to crack down on gamers and managers trying to figure out what to do under a possible new tax system. This is something Xue Kai expects other nations will soon do, with India proposing a 30% cryptocurrency trading tax in

The growth of the cryptocurrency economy within the Philippines did not escape the traditional financial system's radar as well. UnionBank of the Philippines announced earlier this year they would be launching their own cryptocurrency trading platform, which would provide custodial services.

Nonetheless, Xue Kai feels that the Philippines should be emulating "the involvement of banks or conventional financial services in crypto."

Despite this, the BSP desires to keep cryptocurrencies at a safe distance due to the lack of stringent rules in the sector and its shifting nature. Xue Kai feels that governments should encourage the cryptocurrency market to manage this volatility by incentivizing it.

A growing number of virtual currency exchanges are in the Philippines. There are now 17 registered companies that offer virtual currency exchange services, according to November 2020 records.

Blockchain-based digital currencies, on the other hand, have several advantages. Their decentralized nature gives them a critical advantage over traditional monetary systems in terms of security and transparency. Traditional financial institutions entering the sector, as was the case with UnionBank, and crypto-ventures forming associations are two future trends in the field that Xue Kai foresees.

Xue Kai said that he wishes the likes of PDAX, for example, would take the wheel on the project because certain areas of the Philippines are comparable to those in Indonesia, referring to a local cryptocurrency exchange platform that got second-round funding from several investors recently.

At the same time, as legal tender, cryptocurrencies could potentially eliminate a barrier that they face. However, according to Nicholas Antonio Mapa, senior economist at ING Bank in Manila, this is unlikely to happen.