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The CBN Cryptocurrenncy Ban: Jelurida Africa Reacts

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It was a shocker to all when the CBN released the circular to all banks and financial institutions to stop facilitating payments for cryptocurrency exchanges, and to close all bank accounts tied to these actions. Nigeria represents the 3rd largest cryptocurrency trading country on a global scale, with a lot of blockchain projects either being pushed out or about to be pushed. The circular has not only attracted a lot of criticisms from business folks and investors both locally and international, but it has also gathered a momentum stagnation for a lot of plans in development, as most fintech payment service providers halted all supports for crypto payment processing. 


Prior to this sudden release of the circular, there have been a number of dialogues with the likes of Securities and Exchange Commission, the Nigeria Deposit Insurance Corporation and even the Central Bank of Nigeria, on creating innovative ways to regulate cryptocurrency. This seemed to be yielding results, as cryptocurrencies were broadly classed as “securities” along the journey.  

Cryptocurrency has, by far, become a means of sustaining the economy of the country, providing an edge against inflation on the local currency for investors, and creating a means of livelihood for a lot of others in a country with high rate of unemployment. This new action of the CBN will, in so many ways, deteriorate the economy of the nation which is currently unstable.

Looking closely into the situation, what they were able to achieve, giving the absolute power in their possession, is to mandate financial institutions to avoid processing any cryptocurrency-related transactions. Ever since, a lot of individuals have kickstarted the process of creating alternatives. Imagine this; a nation with over 200 million population, a higher percentage of which are youths involved in cryptocurrency, now gradually removing themselves from depending on the banking sector. Blockchain technology has the potential to provide banking services for the unbanked settlements. Gradually, we approach a future where the banks become less relevant and are replaced by blockchain innovations such as DeFi solutions. Alas, the required push to get to a destination originally planned by Satoshi Nakamoto was influenced for Nigerians by the CBN.

Jelurida Africa recently expanded its borders of operation into other African countries, asides Nigeria. What a coincidence! Offering blockchain services to Ghana, Rwanda, Kenya and Tanzania, with more expansion plans for regions more open to highly scalable and decentralized innovations. Nigeria is well endowed with experienced techpreneurs, versatile blockchain developers and of course, funding opportunities from private sectors and wealthy individuals. The only major challenge ever faced in the country, as regards innovative development, has now emanated from the supposed enablers of innovations— the government. We can only hope that this is a nightmare we will soon wake up from. Must we learn the hard way from the pandemic, only to move backward when it is the perfect time to embrace innovation? 

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From Libra to Diem: What happened to Facebook’s Digital Currency plans

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Facebook digital currency
Source: Getty Images (modified)

In 2019, Facebook Inc. announced the Libra, a digital currency project being developed by the company. Libra was unveiled to be a blockchain based stablecoin backed by bank deposits and short-term government securities and was to be integrated into Facebook’s services like Messenger and WhatsApp. The Libra blockchain was said to be able to handle 1000 transactions per second, in stark contrast to Bitcoin’s 7 transactions per second. Needless to say, the news that the largest social media company was working on a cryptocurrency rocked the market for a while. But for some reason, we haven’t seen anything really significant happen since then. Why?

First off was the regulatory hurdle. It would appear that Facebook realized that it didn’t have top marks in the trust department, especially in public opinion. To this end, the Libra project was grilled by U.S lawmakers in July 2019 and the central theme was the issue of trust and data privacy. Other regulators also commented on the issue, with European Central Bank board member Benoit Coeure reportedly saying that digital currencies such as the Libra could challenge the supremacy of the U.S. dollar. Similarly, France’s and Germany’s finance ministers at the time had expressed concerns over the Libra, citing risks around financial security, investor protection and anti-money laundering laws.

Libra also faced the hurdle of its project partners dropping out of the initiative. Founding members eBay, Visa, Mastercard as well as PayPal withdrew from the project which may have had a hand in stalling it. The regulatory scrutiny surrounding the project and Facebook’s own unpalatable reputation might have influenced the decisions of the partners who left the project.

This story would be incomplete without mentioning the efforts at rebranding which morphed the project from Libra to Diem in late 2020. These efforts may have been subtly aimed at distancing the digital currency from the scandals and scrutiny that plagued Libra as a result of its association to Facebook. However, those efforts haven’t been particularly successful. As a result of these factors and more, the Diem association scaled back its earlier hoped for global launch and instead settled for a U.S. stablecoin. That doesn’t seem to have happened.

All in all, it would appear that Facebook is adamant in the pursuit of this blockchain system. However, regulators aren’t completely convinced. The headache seems to be about the issues around it’s possible widespread use, considering the amount of Facebook users. The apprehension is about such a currency’s competitive power with other fiat currencies as well as privacy concerns.

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Africa Blockchain Institute

Africa Blockchain Institute Organized The First African Blockchain Summer Bootcamp For Teenagers In Ghana

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In the spirit of catching them young, the Africa Blockchain Institute organized the first-ever Blockchain Summer Bootcamp for teenagers (age range 13 to 19 years old). A successful Bootcamp, according to the participants’ testimonials and stakeholders, held at the OpenLabs, Ring Road, Accra Ghana, between Monday 2nd August, and Friday 6th August 2021. 

The teenagers applied from across Africa, and selected participants all converged at the OpenLabs, Ghana, for an intensive five days of learning, interacting, and implementing personal  Blockchain projects. The participants were divided into three significant tracks, thus; Blockchain Development, Blockchain for Creatives and Blockchain Entrepreneurship. 

Blockchain Summer Bootcamp for Teens by ABI
Blockchain Summer Bootcamp for Teens by Africa Blockchain Institute

Across these three tracks, the teenagers learnt introductory units to Blockchain Development for societal challenges, Blockchain evangelism, Non-Fungible Tokens, and how Cryptocurrency works. Another highlight of the program was the excursion to the Accra Digital Centre, where the Boot Campers were introduced to the tech ecosystem and feel of the Ghana Tech Lab and Accra Innovation Hub spaces. A visit was also made to the Museum of Science and Technology, and the teenagers got to understand the history of technology in Ghana. 

Worthy of mention was the panel session aimed at motivating the students to pursue a career in technology. While making his comments during the panel session, the founder of BankLess Africa, Mr. Muntala Mohammed Shaibu, urged the teenagers to stop seeing themselves as too young to experiment with new technologies. In her remarks, Ms. Elohor Thomas, CEO & Co-Founder of CodeLn, urged the teenagers to continue to explore their interest in technology and blockchain early.

Blockchain Summer Bootcamp for Teens by ABI
Panel Session, Blockchain Summer Bootcamp for Teens by ABI

The Bootcamp ended with personal project presentations from the Blockchain Development and the Blockchain for Creatives & Entrepreneurship tracks. Projects such as NFT blogposts, Blockchain product reviews and Blockchain for transport and logistics were presented. The best presentation won the OpenLabs scholarship for Robotics Course. Thanks to Dr Sujith Jayaprakash, the Director of OpenLabs, Ghana, for the offer of scholarship. In his closing remark, the Executive Director of the Africa Blockchain Institute, Mr. Kayode Babarinde, urged the teenagers to continue using the  skills and knowledge gained during Bootcamp to explore Blockchain-related solutions further. We also appreciate Mr. Ganzaro Omar, Chairman, AfroBlocks, for his supports, and fostering collaborations with the Ghanian Blockchain community.

The Africa Blockchain Institute will continue to hold future Blockchain Summer Bootcamp series in various African cities to drive Blockchain knowledge into innovators early enough. 

Oluwaseun David ADEPOJU

Head of Research,

Africa Blockchain Institute. 

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CBN Crypto Ban Increases P2P But Is It Also Increasing Crypto Scams?

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Crypto ban

The Central Bank of Nigeria CBN on the 5th of February 2021 caused an uproar within the crypto community in Nigeria and globally. The Apex bank released a circular that prohibits financial institutions from processing crypto-related transactions. Banks and other financial institutions were also directed to close accounts that made crypto-related transactions.

As expected the directive did not sit well with crypto enthusiasts, traders and most Nigerians alike. In the CBN’s defence, they were protecting Nigerians from crypto-related scams, volatility of the crypto market and several evils perpetrated with cryptocurrencies. Though valid reasons, many Nigerians still express their resentment of the directive. Cryptocurrencies which serve as an alternative to the weakening Naira are faster and easier at facilitating cross border transactions. 

However, the ban has not hindered crypto transactions in the country. The country still ranks high when it comes to crypto transactions globally. Business Insider reports that between January and March 2021,  p2p trading value of bitcoin in Nigeria was worth $99.1 million. This is $9 million more than the value of bitcoin p2p transaction in Kenya for the whole of 2020. Cleary p2p has increased significantly since the ban. It is therefore safe to say that the ban has increased crypto activity in Nigeria. But has it increased crypto scams too?

The dark side of p2p

While volatile nature cryptocurrencies might in truth lead to loss of funds, the ban by the Central Bank of Nigeria could make Nigerians more vulnerable to crypto scams as they now purchase these digital currencies from unregulated sources hence, p2p.

“It was very easy just buying bitcoin straight from the Luno app but now I need to find someone who is willing to sell me bitcoin and there is really no way to ascertain the person’s trustworthiness.” This statement by crypto newbie, Adekunle Agbetiloye sums up the troubles and vulnerabilities crypto newbies go through to buy and sell crypto assets.

Kunle has been fortunate to have friends that are more grounded in trading cryptocurrencies. This has prevented him from falling into the hands of scammers that find newbies like him, easy picking. In his words “I know people that have fallen victim to crypto scammers that is why I only transact with people that I know personally”.

Ezekiel Juwon wasn’t lucky enough to buy from someone he knew personally. He recounts how he unsuspectingly sent money to a crypto scammer. In his words, “as a beginner I think it is more convenient to buy directly from crypto apps than dealing peer-to-peer. As someone who has experienced crypto scams first hand, I know this for a fact”. Juwon also adds that regulated p2p platforms created as an alternative to trading crypto can also be dangerous. He is convinced that more people will suffer his fate if the ban isn’t lifted. “Everyone wants to get in on crypto, it saves you from poverty so the ban just makes newbies vulnerable”. 

Just like Adekunle, Oyin Komolafe is fortunate to be surrounded by crypto veterans. She says “aside from the grace of God, what is helping me is that I am surrounded by people who know their way around crypto. However, I am sure that newbies will be susceptible to crypto scams because of the CBN ban”

What experts have to say   

However, Crypto expert and blockchain stakeholder, Samuel Attah feels crypto platforms have created alternatives that should keep crypto newbies safe. He sights Bundle as an example of these platforms. In contrast, some of these new users have said they do not find these platforms easy to use. 

Another crypto trader who identifies himself simply as Smogz, says these alternatives by crypto exchanges and crypto platforms require a lot of expertise. Smogz believes that the ban will increase crypto scams. “Crypto platforms serve as a shield to protect crypto beginners from scams. Now that these beginners have to look outside of the confines of these platforms they are open to being ripped off”

It is clear the crypto ban cannot stop Nigerians from using cryptocurrencies. Although a risky investment venture, crypto assets are known to be a source of wealth. Ensuring the safety of Nigerians while they use these crypto assets should be a priority.

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