Strike Expands Lightning Network-Powered Remittances to Philippines
Digital payments firm Strike is expanding its international money transfer service that runs on Bitcoin’s Lightning Network to the Philippines, in a push to tap into the country’s $35 billion remittance market, one of the world’s largest.
The remittance service, Send Globally, will be available in the Philippines starting Tuesday, according to a press release. It runs on the Lightning Network, a “layer 2” scaling solution that enables cheaper and faster Bitcoin transactions. Funds sent via the service from abroad can be received as local currency in the recipient’s bank or mobile money account, according to the release.
Strike, which has made waves through its work with El Salvador to support bitcoin as legal tender in that Central American country, is hoping to upend the traditional multi-billion-dollar remittance industry, which it says is plagued by high fees and slow processing times, by leveraging Lightning’s low-cost and near-instant payments to serve the millions of users who send over $12 billion from the U.S. to the Philippines each year. Send Globally already has deals for service in three African countries.
“When you think cross-border, you don't think very fast, very cheap and very good experience,” Strike founder and CEO Jack Mallers said in an interview with CoinDesk. “We're using Bitcoin's Lightning Network under the hood to achieve some stuff that has never been possible before.”
Lightning Network growth
It hasn’t always been possible to send bitcoin (BTC) cheaply and quickly; until now. Lightning analytics site, 1ML shows a vibrant network with over 16,000 nodes, more than 76,000 channels (connections between Lightning nodes) and a network capacity close to 5,300 BTC (roughly $122 million at the time of publication).
“Even a couple years ago, Lightning wasn't as developed,” Maller explained. “A network is only as strong as its participants. The growth of the network has economies of scale and network effects that we've never seen before.”
According to the release, the Strike app converts dollars into bitcoin and sends a Lightning payment to a third-party partner in the recipient’s country. (Strike has partnered with Bitcoin payments firm Pouch.ph in the Philippines). The partner converts that bitcoin into local fiat currency and forwards the money to the recipient’s bank or mobile money account.
Mallers says all of this takes place outside of the view of users, shielding them from the complexity of bitcoin payments and removing any potential tax implications that could result from the sale and disposition of bitcoin.
“There's all sorts of tax consequences involved if I wanted to remit money from here to the Philippines. I have to tell the IRS about it. That's ridiculous,” Maller said. “We use the properties of Lightning under the hood. So our users don't even know we're using it. They're just sending dollars and receiving pesos.”
Expanding to the Philippines isn’t Strike’s first international foray. Last month, Send Globally launched in Nigeria, Kenya and Ghana.
“We have partners all over the world”, Mallers said. “Because Lightning is this open payment network.”