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Central Bank of Egypt Resounds Warnings Against Trading in all Cryptocurrencies

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Central Bank of Egypt

According to Daily News Egypt, the Central Bank of Egypt (CBE) has, once again, sent out a warning statement to the general public, against issuance, dealing, trading, or promoting all kinds of cryptocurrencies such as Bitcoin and any other associated activities. 

The Central Bank of Egypt (CBE) indicated in the warning statement, that cryptocurrencies are associated with high risk due to their fluctuations, instability, and extreme volatility. Also, it is an uncontrolled and unregulated global speculation, making investing in them risky, which can lead to huge loss of funds.

The warning statement points to Article 206 of the Central Bank and Banking System Law promulgated by Law No 2020, which restricts all activities related to cryptocurrencies, with a major spotlight on Bitcoin. 

In the warning statement, the Central Bank of Egypt (CBE) said that cryptocurrencies are not issued by them, or any official central issuing authority which can be held responsible. Also, these cryptocurrencies are not backed by any tangible assets and not under the jurisdiction of any regulators anywhere in the world. This means they lack the official backup support by the government enjoyed by the official currencies issued by the Central Bank of Egypt.

The Central Bank of Egypt (CBE) further said that trading of official currencies approved by them is allowed within the country, Arab Republic of Egypt. Also, all business owners within the Egyptian market are advised to stay away from trading in these high risk currencies – cryptocurrencies.

In 2018, cryptocurrency trading was forbidden in Egypt by Shawki Allam, the most senior religious authority of Egypt. Shawki declared the use of cryptocurrencies as forbidden under the Islamic Law which was passed in the form of a fatwa. He explained that the anonymity and volatility associated with cryptocurrencies could increase money laundering, tax evasion, terrorist financing and other illegal activities. 

The religious decree by the Islamic Religion Authorities, is not legally binding and was not totally accepted by the masses. Despite the prohibitive religious law, Peer to Peer (P2P) Trading Platforms such as LocalBitcoins and Paxful, have increased steadily in terms of new users and trading volume.

Between 2019 and 2020, the trading volumes data from both LocalBitcoins and Paxful, shows that new member registrations and trading volumes went up by 100%, according to the firm’s Chief Marketing Officer, Jukka Blomberg. 

But in early 2021, the Trading Market Volume data from Useful Tulips on both LocalBitcoins and Paxful shows that there has been an increased surge, which was more than the previous year, 2020. This made the firm’s Chief Marketing Officer, Jukka Blomberg, confirm that January 2021 was “the best month within the last three years.” in terms of trading market volumes.

Also, the total crypto trading volume and exchange sign-ups increased dramatically in Egypt across cryptocurrency platforms, surpassing the already high volume of 2020. According to Konstantin Anissiimov, the CEO of CEX.IO, a UK-based cryptocurrency exchange, bitcoin trading volumes in Egypt were up by more than 400% from December to January. This reflects massive adoption by the masses.

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  1. zetel kopen

    9 April 2021 at 6:21 PM

    Furthermore, the BBC was shown a customer s bank correspondence, which contains the warning: We strongly advise that you do not use your account for cryptocurrency-related activities so you don t get into trouble with the law . However many investors with the possibility say they will continue to trade using their overseas bank accounts.

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Bitcoin in Africa

Crypto Regulation or CBDC? What Africa’s Biggest Crypto Hotspot Requires?

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Crypto in Nigeria
Image Credit: Kabiru Yusuf

On February 5, 2021, the Central Bank of Nigeria rolled out an order urging financial institutions to close the accounts of persons or entities that transact in or operate a cryptocurrency exchange.  According to the apex bank, digital currencies generated by unregulated or unregistered firms raise legal concerns because they can be used to perpetrate illicit affairs; money laundering and terrorism. While this gives partial explanations to the clampdown on cryptocurrency in Nigeria, there were uproars from various quarters. Questions were raised on whether or not the ban of crypto was the way forward to the growing interest in digital currencies. The clamour for regulation of cryptocurrency was not only limited to the masses, it includes Senators, Honorable members of the House and the intervention of Vice President Yemi Osinbajo.

About 5 months after the supposed ban on crypto was made, CBN made another giant stride. At the Monetary Policy Committee Meeting (MPC) held on Tuesday, July 27, the CBN Governor, Godwin Emefiele, confirmed that a digital currency (CBDC) will be launched in October. What exactly is the CBN digital currency about? How does it affect Nigerians, especially crypto traders? Why does the CBN have to launch digital currency when regulations can be made for the existing cryptocurrency? These and other questions still linger in the minds of financial analysts and crypto enthusiasts.  Thus, the need for this article. 

What is CBDC?

The CBDC is an ‘e-Naira’ that is supported by law and can be used as legal tender. Due to this, it is usually considered as the central bank’s liability.   CBDCs are blockchain-based but centralized and supervised by bank regulators. This is the distinguishing factor between cryptocurrency and CBDC; while the former is highly decentralized, the latter is centralized and regulated by the central bank that created it. To achieve its centralization, every bank connected to the blockchain system can collate transaction data that can be aggregated and relayed to the CBN. Just like stable coins, the digital currencies will be pegged to the fiat Naira at 1:1.  The currency would most likely be issued to commercial banks which in turn be made available to customers. The CBN started research on CBDC in 2017 alongside 80% of other central banks. However, only the Bahamas, the Eastern Caribbean and China have implemented it in practice. The CBDC is set to be Africa’s first digital currency as it is closest to being pulled through. Other countries like South Africa, Ghana, Morocco and Kenya are working on introducing digital fiat currencies. 

How CBDC affects Nigerians: a Gift or a Curse? 

Any Nigerian operating a business will certainly be concerned about the effect of the CBDC on the financial market. For crypto enthusiasts, it is another form of witch-hunt put in place by the central bank to clamp down on cryptocurrency. Since digital currency is the future and cryptocurrency is “evil” as proposed by the apex bank, CBDC will enable faster transactions and promote the development of e-commerce. It will create innovative opportunities in the financial system as new business opportunities will arise from emerging business models, financial products and services. While there seem to be endless advantages of CBDC, its curses are no doubt evident in the ways it will be regulated. Transparency and centralization of the digital currency will enable the central bank to know who is holding what money at a particular point in time. With such regulation in place, the government can use CBDC to surveil the citizens, determine how much they earn, what they use the money for, where they save the money. Since it can be used to determine the amount a particular person earns, it allows the government to leverage tax on citizens. These are the ‘ill’ cryptocurrency permits, hence, its ban. 

Crypto Regulation or CBDC? 

 You may wonder why the central bank is interested in creating its digital currency when it could tap into the existing cryptocurrency. The reason behind this is not far-fetched. One of the important reasons for the ban on cryptocurrency was because it is highly decentralized. Not only because the government does not have control over it but because transactions are only known to the two parties involved without the parties knowing each other. This allows some users to carry out fraudulent activities; cybercrime and money laundering through cryptocurrency. A call for the regulation of cryptocurrency is quite impossible due to its decentralization, to solve the problem of anonymity, there is a need to launch a digital currency that can be monitored. To the Nigerian government, CBDC has the same function as cryptocurrency (except the issue of anonymity which is unimportant if one has nothing to hide). It is the government’s way of regulating crypto and embracing the opportunities the new system provides. 

In conclusion, while the CBDC may seem like a plot by the Nigerian government to further clamp down on cryptocurrency and to monitor the citizens, it is rather counter-productive to critique before it gets launched. For now, it is an idea that is yet to see the light of the day, the loopholes can only be confirmed after its launch in October.  

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Bitcoin in Africa

Crypto in Africa: Where are we Today, and Where are we Heading?

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African countries have always been acquainted with the brisk implementation of digital solutions and technologies. From the use of mobile phones to e-payment platforms, they have always been up-to-date. However, the extent to which blockchain and cryptocurrency have been embraced in African countries is varied. 

While several African countries are taking full advantage of the cryptocurrency space, there are also countries whose governments remain unreceptive. There is the issue of regulation, the need for it, and the lack of proper crypto infrastructure that will enable fast-paced access. 

Studies have shown that the main pioneers of cryptocurrency in Africa are countries such as Botswana, Ghana, Kenya, and Nigeria. This article will outline the latest developments taking place in the above-mentioned African countries, and what it means for their future in cryptocurrency. 

 

BOTSWANA

Primitively, the adoption of cryptocurrency in Botswana was welcomed with indifference and a lack of official stance. This indifference was followed by a decision by the Bank of Botswana (the central bank of Botswana), to not regulate cryptocurrencies. Meetings conducted by firms in the country with the government officials to discuss the potential use of blockchain technology showed that the officials were skeptical about what advantage lies in their adoption of the technology. 

Despite the lack of regulation, there was the development of several blockchain start-ups in Botswana:

  • Kgoboko: This start-up was founded to attend to the needs of those who do not have access to the services of banks or financial organizations. 
  • The SatoshiCentre and Plaas: This was established by Alakalani Itireleng in 2014. The SatoshiCentre was initiated to create awareness and spread the word about Bitcoin across Botswana and Africa. Since its inception, it has successfully introduced bitcoin to entrepreneurs across the country thereby creating room for a community of individuals who are interested in blockchain technology. Plaas is a start-up launched under SatoshiCentre to enable farmers to manage their daily productions on the blockchain spectrum. 

On the future of crypto in Botswana, the founder of SatoshiCentre simply said she wants to build and keep educating people about the bitcoin ecosystem without wavering. In her words, compared to 2013, a lot of people are now involved in bitcoin, and this means Bitcoin’s future in Botswana is hopeful. 

 

GHANA

On the 22nd of January, 2018, the Bank of Ghana released a statement stating that the use of digital currencies is not licensed under the payments system acts and as such, the public is to do business with only licensed institutions to ensure that such transactions fall under the country’s regulatory scope. 

Since then, the Bank of Ghana drafted a Payments Systems and Services Bill that they believed would enable the regulation of cryptocurrency in the future. However, the use of cryptocurrencies is still being discouraged because of the perceived risks that come with them and how individuals have lost money to crypto-related transactions. 

The Deputy Director-General of the Security and Exchanges Commission SEC, Paul Ababio, in an interview, said that Ghanaians should desist from blockchain technology. He eventually added that a framework for the regulation is being devised and that a final decision will be passed across.

This does not change the fact that Ghana is one of the top African countries with high cryptocurrency trading volumes. 

 

KENYA

The enactment of cryptocurrency in Kenya, like many other African countries, was met with indifference by the government. In the case of Kenya, its central bank was worried about the degree of uncertainty in the future price, as well as the unpredictability of the technology. 

Over time, the estimated number of bitcoin transactions in Kenya grew to over $1.5m as business owners began making use of the technology to accept payments. The business owners stated that they enjoyed the convenience and how it has helped to reduce the cost of transactions. 

Kenya’s Land Commission welcomed the technology with open arms, with hopes that it would help put an end to the fraudulent acts involved in the purchase of lands. The Blockchain Association of Kenya is working to educate individuals on the benefits of using bitcoin and cryptocurrencies. 

On the issue of regulation, Kenyans believe that the regulation of digital currencies by the Central Bank of Kenya will speed up the adoption of cryptocurrencies, but this has been slowed down by endless discourse. Methods have been suggested as to how the sector can be regulated to ensure benefits to the individuals and the government. 

A task force was set up in April by the Kenyan government to enable a better understanding of why blockchain technology should be regulated. 

 

NIGERIA

In 2017, the Central Bank of Nigeria warned institutions and individuals to desist from crypto-related trades as they are not the legal tender in Nigeria. They went further to state that whosoever gets involved in it does so at their own risk. The Nigerian government had major concerns that the rise of blockchain technology would bring about fraudulent activities. 

Despite these warnings, Nigeria went on to have the world’s third-largest bitcoin holdings as a percentage of gross domestic product. 

Fast forward to the 5th of February, 2021, the Central Bank of Nigeria issued a statement that saw the termination of all crypto-related activities. Financial Institutions were ordered to close the accounts of any individual that has conducted cryptocurrency transactions. 

However, the ban was unsuccessful in eradicating blockchain technology in Nigeria, instead, it made room for peer-to-peer exchange (p2p). Research shows that the trading volume in Nigeria has grown significantly despite the ban. In May, Nigeria received $2.4 billion worth of crypto. 

Conclusively, it is quite evident that Africa will, someday, spearhead blockchain technology and the adoption of cryptocurrencies. The ability to thrive in spite of bans, lack of regulations, and a dearth of infrastructure is a crucial pointer as to the wealth of opportunities that exist on the continent. 

Image Credit: Kabiru Yusuf

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Bitcoin in Africa

Crypto Wallets: A Major Hurdle To Crypto Mass Adoption – Interview with Francis Obasi, Lead Wallet CEO

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Image Credit: Lead Wallet / Twitter (Image was modified)

Cryptocurrencies are getting more popular each year, but mainstream adoption and usage of digital currencies and assets are nowhere close. According to Buy Bitcoin Worldwide, 1.3% of the world’s population uses bitcoin. While a great number of people might know about cryptocurrencies, very few people own or use them. 

For Francis Obasi, the CEO of Lead Wallet, a  major obstacle to crypto adoption is the ability to create and simply use a crypto wallet. Whether trading, staking or hodling, owning a wallet is the basis of transacting in crypto. This is why Francis has created an app that he believes will help people enter the crypto ecosystem seamlessly. 

The idea behind Lead Wallet 

Before Lead Wallet, we were a group of community managers working for AmaZix. One of the most frequent questions we got then as community managers are “where will I store my cryptocurrency, which wallet is the best wallet?” We most times recommended Trust Wallet, we would explain the process of setting up the wallet. Unfortunately, some of these crypto newcomers fall victim to impersonators. For example, someone would impersonate me and tell people to disclose their private keys. People were getting scammed off their cryptocurrency and it became a concern for me. 

Consequently, I realised that the bridge between conventional finance and the crypto space is a digital wallet. To interact with anything crypto-related you need a crypto wallet. So the crypto wallet is a very important factor in understanding what cryptocurrencies are and keeping new users safe. It is their first point of contact when they choose to enter the crypto ecosystem. 

However, a lot of crypto wallets are not simple enough for new users. We decided to create something that will not seem strange to people who are already used to bank applications (which are simple to use).In essence, a crypto wallet bridges the gap between conventional finance and decentralized finance. 

We chose the name “Lead” because we were building something different from what is considered the norm within the crypto ecosystem. We were setting a new standard, a wallet that will “Lead”  the crypto mass adoption. 

What a simple crypto wallet should look like?

A good wallet should reduce a user’s journey in performing simple tasks such as sending and receiving cryptocurrencies. Inside Lead Wallet, there is an ostensibly placed “send” button. Rather than having too many steps to simply sending cryptocurrency, it should not be more than four. In fact, doing most things on a crypto wallet should not take more than 4 steps. 

So no matter how uninformed one might be about cryptocurrencies, using a crypto wallet for the first time should be easy. 

Owning your own private keys

Owning your own private key means that you are in control of your crypto assets. The saying “not your keys not your coins” explains it well. A private key is an alphanumeric string that is generated at the creation of a wallet. 

Having your own private keys means you are in charge of your own crypto asset. A wallet like Trust Wallet or Lead Wallet gives you power over your own crypto assets, it is a decentralized wallet. However, unlike Trust Wallet that stores all crypto assets within one private key, Lead Wallet creates a unique private key for each crypto asset. This gives users the ability to export wallets to other platforms such as Trust Wallet. 

Decentralized crypto wallet is the gateway to DeFi

Decentralized Finance, known for short as DeFi, is a disruption to the traditional financial system. DeFi gives everyone a chance to enjoy financial services without the bottlenecks that come with traditional or centralised financial services. 

Savouring the fruits of decentralized finance requires a decentralized crypto wallet that can connect to a web 3 browser. Like Lead Wallet, such a wallet should offer a very user-intuitive web 3 browser that helps them interact with DeFi applications. Lead Wallet provides these apps as bookmarks to protect users against malicious links. 

There is a lot going on in the crypto world, a lot of people genuinely want to be a part of it but there’s a lot they do not know. A crypto wallet which is most likely their first point of contact with the crypto ecosystem should simplify things for them. 

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