26 Jan

Central Bank in Africa’s Top Bitcoin Market Warns of ‘Gamble’

The central-bank governor of Nigeria, where bitcoin trading grew the most in Africa last year, said investing in the cryptocurrency is a “gamble” and hinted it may have to be regulated.

“Cryptocurrency or bitcoin is like a gamble, and there is a need for everybody to be very careful,” Central Bank of Nigeria Governor Godwin Emefiele said in an interview on Wednesday at his office in the capital, Abuja. “We cannot as a central bank give support to situations” where people risk savings to “gamble,” he said.

Emefiele is the latest among regulators globally to express concern about bitcoin, one of the most popular cryptocurrencies, because of high volatility and a perception that it facilitates crime.

In January 2017, the central bank released a circular to lenders asking them not to use, hold, or trade virtual currencies pending “substantive regulation and or decision by the CBN.”

Still, demand for the digital currency is surging in West Africa’s biggest economy, with peer-to-peer transactions rising almost 1,500 percent this year, second only to China, according to data from LocalBitcoins.

A bitcoin wipe-out would generate the biggest losses in Russia, followed by New Zealand and Nigeria, according to a report published by Citigroup Inc. in December.

Bitcoin was little changed at $11,254 by 7:12 a.m in London compared with an intraday high of $19,511 on December 18, according to a composite of prices compiled by Bloomberg.

U.K. Prime Minister Theresa May on Thursday promised to consider clamping down on the cryptocurrency. Central banks in China and Russia have stopped local-exchange trading of bitcoin.

“I have asked my colleagues in the research and monetary-policy department to study the market and get to know what the issues are,” Emefiele said. The central bank may in future “make some very concrete pronouncements as to the direction,” he said, without giving details.

11 Jan

Africa: How Africa Can Ride On the Cryptocurrency Wave

ANALYSIS

Nairobi — Cryptocurrency to most people and institutions in Africa is a very big, and daunting word. Like all new technologies, the concept of digital currencies remains an abstract idea to a lot of people, ushering in change and attempts to alter the status quo.

But the truth is change happens, whether we are ready or not. Those who take advantage of the change wave, stand to benefit as early adopters.

The opportunity to once again take charge of our own destiny has been presented to us as Africans. The question now is not about cryptocurrency, the question is what are we going to do to harness the full power of this opportunity?

In the beginning of trade in Africa, we travelled across lands, and water to trade amongst ourselves. The farmers from the west had cocoa; the nomads from the north had camels and other resources. Each measured the value of their goods or service and agreed on the exchange. “Trade by batter was born”

Then gold came, and other valuable resources so people started using this as a form of trading, then we had promissory notes, which were convertible based on the value of gold, or silver the issuer of the gold had in their vault. All these evolved into what we now call money today, and the unit of that money we derive from either the dollar, euro, pound even yen at the minute.

Cryptocurrency has landed at our doorstep and it’s a scary thought. Let me first define cryptocurrency.

Cryptocurrency is defined as a digital asset designed to work as a medium of exchange, using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.

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