Letter from Manila

Cryptocurrency exploded in popularity after the 2008 financial crash, its libertarian advocates claiming that it would free citizens from the gouging and exploitation of a corrupt banking system and deliver comparatively better asset security, store of value and protection against inflation. But crypto has also become the currency of choice for swindlers across the globe, from the UK (where there was a 40% spike in crypto fraud last year, according to the FT) to South Africa (where, in 2021, Africrypt bosses embezzled £2.6bn of their investors’ Bitcoin) to the US (where ex-HTSB CEO Shan Hanes was recently sent down for 24 years for illegally filling his crypto wallet with £36.2m of his own bank’s funds). For all the utopian hot air once emitted about the crypto economy being a radical improvement on conventional capitalism, it too is susceptible to the boom and bust cycle, with a small elite doing considerably better out of the arrangements than the vast majority.

The Philippines has been at the sharp end of these problems. In the late 2010s/early 2020s, young Filipinos were being paid to play the video game Axie Infinity, in which the aim is to breed psychedelic Pokémon-like creatures (Axies) and make them fight each other. In the game, Axies, pieces of land and other objects represent non-fungible tokens (NFTs) which are digital assets with a monetary value. Stored on a blockchain, a digital ledger that records and authenticates transactions, these NFTs were awarded to players by the game’s developers and could be exchanged for Philippine pesos and US dollars, says Jayvy Panahon, who was then responsible for paying Axie Infinity gamers their salaries, but is now a Manila-based crypto trader and investor.