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Ghana And Nigeria, Take Opposing Stance On Crypto



On the 25th of February 2021, the Bank of Ghana issued a press release revealing how it intends to handle innovations in the financial space. With special preference given to blockchain, this stance by Ghana’s Apex over blockchain and by extension cryptocurrency, largely contradicts that of its West African counterpart. The Apex Bank of Africa’s largest economy has only a few weeks ago expressed its distrust for the blockchain-powered currencies, noting that they are a means to an illegal end. 

While the Central Bank of Nigeria has since received a unanimous backlash from many Nigerians, hopes that it will reverse its ban on cryptocurrencies isn’t imminent. Its stance on the widely acclaimed cryptocurrencies has been reiterated by the CBN governor who says ” crypto is money out of thin air used by players in an electronic dark world where transactions are extremely opaque, black, not visible and not transparent.” 

Despite the Central Banks unequivocal stance against crypto, Nigeria remains one of the leading countries in crypto usage globally. With over half a billion dollars transacted in cryptocurrencies to date, crypto usage shows no signs of stopping. Rather the ban has drawn the attention of many to the decentralized currencies and why they seem to be causing a stir in the country’s financial ecosystem. 

Ghana thinks different

In the circular released by the Central Bank of Nigeria, it claims other countries view cryptocurrencies with as much disdain as it does. 

Apparently, Ghana isn’t one of those countries. The circular released by the Bank of Ghana, reveals it’s giving a chance to the blockchain-powered currencies to operate within its financial space. 

Taking into consideration that the current state of finance is evolving, the West African nations top bank is prepared to build a regulatory framework that oversees and supports financial institutions in taking on innovative models on delivering financial services. 

Ghana’s direction on crypto can be perceived as friendly unlike Nigeria’s. In what many call an outright ban on cryptocurrencies, the position taken by Africa’s most populous nation on crypto is anything but friendly. 

Perhaps the Ghanaian financial regulators are accepting an unstoppable crypto takeover, a market capitalization of over a trillion dollars makes crypto a technological innovation that should not be ignored. 

With top institutions such as Black Rock, Tesla and Grayscale acquiring large volumes of bitcoin and other currencies, it shows that crypto isn’t a force to be stopped or controlled but only regulated.  

The Bank of Ghana is already on the right path to getting a regulated hold of cryptocurrencies. Fully backing financial institutions to experiment with blockchain, the Bank can understand the technology better and forge an advance regulatory framework that keeps the technology within legal bounds. 

Sandbox Pilot 

A sandbox is a controlled environment that simulates real-life usage of a program or product

Bank Ghana’s regulatory and innovation sandbox pilot, is in collaboration with EMTECH service LLC. EMTECH is a fintech company for central banks. The company allows central banks to test projects such as central bank digital currencies in the sandbox with APIs that enable Fintech and mobile money apps to work with the CBDC 

The company will help with a proper and faster review of innovative projects in Fintech. With multi-party collaborations and integrating seamless workflows, EMTECH will assist the Bank of Ghana in getting a detailed review of what any Fintech innovation will look like. 

Though an accommodating approach to crypto and blockchain in Fintech the Bank’s direction is still cautious, it creates an enabling environment where it wields the power not only to regulate but to understand. 

State of Crypto in Africa.

Twitter CEO, Jack Dorsey has said there’s no better place for bitcoin to thrive than Africa. However, some Africans don’t share the same view. Some countries like Nigeria see it as a threat to it’s financial stability. Ironically Africa’s financial instability has been highlighted as the reason why bitcoin would thrive there.

Bitcoin is already a lifeline for many as the value of the naira sinks. 

While crypto adoption in Africa is no doubt on the rise, the lack of crypto infrastructure is still a major hurdle for many African nations. Only 20 of the 10,267 bitcoin nodes are in Africa. 

Likewise, an unequivocal stance by many African countries on the crypto issue still stands in the way of further adoption and more use cases. 60 per cent of African countries do not have a clear stance or regulation concerning digital currencies.  

Morocco, Nigeria, Algeria and Libya have pronounced an outright ban on cryptocurrencies. Making usage in such countries practically impossible or strenuous.

The economic realities in the many African States make cryptocurrencies a viable alternative for international transactions as well as wealth creation. Unfortunately, African governments are not taking the necessary steps to understand the technology and how it can help the current financial situation. 

The Bank of Ghana has taken a step in the right direction with its sandbox pilot. Though a cautious first step, it improves the understanding of the technology and could facilitate an innovative and never before seen regulatory framework that will usher cryptocurrencies into mainstream finance 


Bolu Abiodun is a recent graduate of Theatre and Media Arts, Federal University Oye-Ekiti. A journalist with over a year's experience on the job. A former editor at American Media company Project Forward, he is a skilled content creator, social media manager and digital marketer.

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Financial Leaders from G7 Release Guidelines for Central Bank Digital Currency



Source: World Atlas

At a meeting that was held in Washington, yesterday, October 13, G7 leaders discussed central bank digital currency and endorsed 13 public policy principles with regards to their implementation. The financial leaders from G7 agreed that CBDCs would complement cash and should not be detrimental to the monetary system. The G7 leaders have been discussing CBDCs this week concluding that they should do no harm and meet rigorous standards.

It should be noted that G7 includes finance leaders in advanced economic nations comprising of Canada, France, Germany, Italy, Japan, the U.S and the U.K. the G7 leaders make it mandatory that any newly launched CBDC should not harm the central bank’s ability to perform its duty of maintaining financial stability. In a joint statement by the G7 finance ministers and central bankers, they said that, 

“Strong international coordination and cooperation on these issues help to ensure that public and private sector innovation will deliver domestic and cross-border benefits while being safe for users and the wider financial system.” 

The joint statement further states that CBDCs are complements to cash and could serve as a liquid or safe settlement assets with an added advantage of anchoring existing payment systems. CBDCs issuance should be entrenched in a long-standing public commitment to transparency, rule of law, and sound economic governance. The statement added at CBDCs must be so efficient that they are fully interoperable on a cross-border basis. 

The G7 leaders agreed that they had a duty to minimize the incidence of ‘harmful spillovers to the international monetary and financial system” 

The G7 statement reiterated a similar statement earlier made by G20 that no global stablecoin project should begin operation until such a token has addressed legal, regulatory and oversight requirements. 

Countries like China and Nigeria are ahead of the pack with regards to the adoption of digital Yuan and Naira respectively. China’s crackdown on cryptocurrency may be a step forward for the country’s plan to promote its digital Yuan. Nigeria, on the other hand, postponed the launch of its eNaira in deference to the 61st anniversary of Nigerian independence on Oct 1. 

However, countries like the US and the UK are dragging their foot with regards to the introduction of CBDCs to their financial system. There are insinuations that America is in danger of being left behind technologically and financially if it doesn’t get serious with the implementation of CBDC in its financial system.

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Learning Guides

Understanding Speculation and Crypto Volatility



Everyone who dabbles in the crypto industry learns almost immediately that the market is very volatile and oftentimes things can change very quickly. That volatility is the fundamental reason why some investors make absolutely stunning gains in so short a time and others lose a lot of money as well. Trading in crypto is one of the riskiest ventures any person can undertake and as they say, it’s not for the faint of heart. The risks can be mitigated of course and sometimes depends specifically on the coin or crypto asset being traded on, barring general market trends.

Nevertheless, to get to the bottom of the volatility concept, one must understand speculation in the market. To start off, the concept of speculation isn’t limited to cryptocurrencies, on the contrary, speculation has existed for as long as economics and trading has. But it is worth saying that speculation is often a feature of novel sectors, assets, commodities and the like. So, even though cryptocurrencies have been around for more than a decade, they’re still in their infancy as far as markets go. One could say that the market is still trying to find its feet.

One of the fundamental reasons why cryptocurrencies are so volatile is that they are fundamentally backed by nothing of value outside the attention that they get. Unlike many fiat currencies which are either pegged to another currency’s value or whose value is unilaterally determined by a central authority, cryptocurrencies only derive value as a function of how many people are willing to use is to transact, i.e. trust in the asset because other people trust it. As a rule of thumb, the larger the number of people who accept the asset, the more valuable it becomes.

This is one of the hallmarks of speculative trading. In the crypto world or in any market that’s novel and untested, many people are in it to win it which means their strategies in trade has the objective of making as much profits as possible in the short term. Therefore, the market enters a subtly dangerous cycle of rapidly changing prices of assets. Basically, investors typically buy assets when prices are low and wait. As more investors are attracted to the commodity for its low prices, it sets off a cascade where more people buy in, causing the price to steadily rise. 

However, all good things must come to an end and it almost always gets to a breaking point whereupon the price gets high enough for investors to begin to sell. This reverses the earlier cascade and as more and more investors pull out, the prices can fall dramatically causing even more to sell off in fear of losing whatever investments they have left. The prices having fallen resets the game and primes investors to begin buying again.

Volatility has been one of the talking points of many critics of cryptocurrencies often comparing it to a Ponzi scheme. And in certain cases, persons of interest with large pulls and audiences can substantially affect the rate at which prices rise and fall. Other factors include government regulations. Volatility at its core reflects the often chaotic nature of trade and market interactions and human hopes and fears.


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Market Watch

What China’s crypto clampdown means for investors



Over the weekend, China, the biggest crypto mining country once again, began to clamp down on cryptocurrency. Ten Chinese agencies including the central bank and banking, securities and foreign exchange regulators have vowed to work hand in hand to expose illegal cryptocurrency activity.

China has always placed stricter rules on cryptocurrencies but the new rule has made all crypto-related activities illegal. According to the People’s Bank of China (PBOC), it is illegal to cryptocurrency trading and anyone that does so will be severely punished; this includes those within China that are working for overseas platforms. To fully phase out the cryptocurrency mining sector, the National Development and Reform Council (NDRC) said that it would launch a nationwide crackdown on cryptocurrency.

Over the years, China does not recognize cryptocurrency as a legal tender. In 2013, the Chinese government referred to Bitcoin as a virtual commodity that individuals are allowed to freely participate in. This freedom, however, precludes banks and payment companies from providing services that are Bitcoin related.

In 2017, Initial Coin Offering (ICO) was banned. The ban was also extended to the conversion of legal tenders to cryptocurrencies by trading platforms which led most of the platforms to shut down operations in China. The crackdown led 88 trading platforms and 85 ICO platforms to withdraw from the market as of July 2018.

To China, the crackdown on cryptocurrency is necessary as the country is trying to launch its official digital currency and the need to fulfil its 2060 climate targets. The crackdown was necessary as cryptocurrency was seen as infringing on people’s properties and ‘disrupting the normal economic order.’

The statement by PBOC on Friday was unequivocal as the current crackdown is distinct from the previous ones. In his statement on Friday, PBOC called Bitcoin, Ether and Tether ‘legally irreparable’ and should not be used. The new regulations forbid financial institutions, marketing and IT providers from supporting crypto-related activities. The activities of both crypto holders and miners are now considered illegal. This is what Henri Arslanian, a PwC crypto leader termed as “No ambiguity. No room for discussion. No grey areas” in his tweet.  

What does this mean for crypto holders worldwide?

The major effect of China’s crackdown on cryptocurrency is the increase in price volatility. While volatility is a common phenomenon in the crypto world, a crackdown initiated by the world biggest cryptocurrency mining country will have a huge effect on market price.    

After the PBOC interview, Bitcoin fell by 4% within 24 hours and is currently trading at $43,320. Ethereum fell by 6% and it is currently trading at $3,036. With the Evergrande debt crisis and the huge blow bedevilling the crypto market, a clampdown by China would most likely keep the market price on the red until another good news crops up.


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From Crypto and Blockchain to AI, Fintech and Web 3.0 delivered twice in a week (Mondays and Fridays)

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