Apple positioned to offer cryptocurrencies – RBC report

Apple positioned to offer cryptocurrencies - RBC report

Apple has proceeded cautiously with cryptocurrencies. The company banned cryptocurrency wallets from its App Store in 2014, but later reversed the decision and now allows them. The Central Bank of Nigeria has said cryptocurrencies promote illegal activities and raise risks, among other reasons. Bitcoin and even Dogecoin, which began as a playful experiment, are soaring in value as billionaires, companies and celebrities promote the digital currencies. Tampa Bay Buccaneers thrash Kansas City Chiefs 31-9 at Super Bowl SAN FRANCISCO — Bitcoin hit a new high above $47,000 on Monday, shooting up more than 45 percent from the The Central Bank of Nigeria (CBN), in a statement addressed to members of the public, said cryptocurrencies are too risky for Nigerians.

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Apple Inc has a “clear opportunity” to offer a buying and selling mechanism for cryptocurrencies, a move that would allow the company to immediately gain market share, according to a research report on Monday from RBC Capital Markets.

With its access to world-class software and a secure ecosystem, Apple could tackle the problem individuals face acquiring crypto assets due to know-your-customer laws and other regulations with the company offering a closed system that prevents nefarious activity, improves asset security, and has instant access to buyers and sellers, the report said.

Also Read | Apple becomes world’s biggest smartphone seller with record shipments

It added that if Apple, which already has a Wallet app, went down this path, the move would likely make the United States a global leader in crypto assets, lessening the possibility of a government shutdown of the industry.

“If the USA owns the most crypto assets (be it Bitcoin or other assets), it would not make logical sense in our view to ban it,” RBC analysts said in the report.

The report came the same day that top cryptocurrency bitcoin strode closer to mainstream acceptance after billionaire Elon Musk’s electric vehicle company, Tesla Inc , revealed it had bought $1.5 billion of bitcoin and would soon accept it as a form of payment for cars – sending the cryptocurrency shooting higher.

Also Read | Elon Musk says bitcoin “on the verge” of being more widely accepted

Apple has proceeded cautiously with cryptocurrencies. The company banned cryptocurrency wallets from its App Store in 2014, but later reversed the decision and now allows them. However, Apple bans mining for cryptocurrencies on iPhones and does not allow its Apple Card credit card to be used to purchase cryptocurrencies.

Source: www.thehindu.com

Author: Reuters

February 09, 2021 12:40 IST

Updated:

February 09, 2021 13:21 IST


Cryptocurrencies breed illegal activities, raise risks – CBN fires back at critics

Cryptocurrencies breed illegal activities, raise risks – CBN fires back at critics

Nike Popoola, PunchNG

The Central Bank of Nigeria has said cryptocurrencies promote illegal activities and raise risks, among other reasons.

It said this on Sunday in a statement regarding various comments and reactions following its recent reminder to Deposit Money Banks to desist from transacting in/and with entities dealing in cryptocurrencies.

The CBN stated, “The recent regulatory directive became necessary to protect the financial system and the generality of Nigerians (including the youth population) from the risks inherent in crypto assets transactions, which have escalated in recent times, with dire consequences for the integrity of the financial system and financial stability.

“Due to the fact that cryptocurrencies are largely speculative, anonymous and untraceable they are increasingly being used for money laundering, terrorism financing and other criminal activities.

“Small retail and unsophisticated investors also face high probability of loss due to the high volatility of the investments in recent times.

“In light of these realities and analyses, the CBN has no comfort in cryptocurrencies at this time and will continue to do all within its regulatory powers to educate Nigerians to desist from its use and protect our financial system from activities of fraudsters and speculators.”

The CBN said for those who were not conversant with the universe of cryptocurrencies, it was important to state that cryptocurrencies “are digital or virtual currencies issued by largely anonymous entities and secured by cryptography.”

It stated, “Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability, and regulation.

“While there are a number of cryptocurrencies now in circulation, Bitcoin was the first to be introduced in 2009, and now accounts for about 68 percent of all cryptocurrencies.

“As regards our recent policy pronouncement, it is important to clarify that the CBN circular of February 5, 2021 did not place any new restrictions on cryptocurrencies, given that all banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, not to use, hold, trade and/or transact in cryptocurrencies.

“Indeed, this position was reiterated in another CBN press release dated February 27, 2018.”

The CBN said its position on cryptocurrencies was not an outlier as many countries, central banks, international financial institutions, and distinguished investors and economists had also warned against its use.

It stated that they had all made similar pronouncements based of the significant risks that transacting in cryptocurrencies portend which include risk of loss of investments, money laundering, terrorism financing, illicit fund flows and criminal activities.

It stated that China, Canada, Taiwan, Indonesia, Algeria, Egypt, Morocco, Bolivia, Kyrgyzstan, Ecuador, Saudi Arabia, Jordan, Iran, Bangladesh, Nepal and Cambodia had all placed certain level of restrictions on financial institutions facilitating cryptocurrency transactions.

Ban’ll boost anti-money laundering compliance, says ABCON

The Association of Bureaux De Change Operators of Nigeria has given its backing to the Central Bank of Nigeria’s policy mandating banks to close all accounts belonging to cryptocurrency traders.

It said this in a statement on Sunday titled ‘ABCON backs CBN’s cryptocurrency trading ban for stronger anti-money laundering compliance’.

The President, ABCON, Alhaji Aminu Gwadabe, said the regulator acted fast to curtail an emerging dangerous trend capable of eroding Nigeria’s Anti-Money Laundering and Counter-Terrorist Financing gains.

He said that before placing a ban on financial dealings that did not conform with the norm, the regulator must have got a financial intelligence on such operations, as seen in kidnappers now collecting bitcoin for ransom.

Gwadabe said the new changing global behaviour towards cryptocurrency trading in Nigeria was not in tandem with Nigeria’s AML/CFT compliance structure as the country battled to move out of the Financial Action Task Force sanctions list.

He said that cryptocurrency trading was pervasive and widespread that every segment and all operators in the financial industry were becoming vulnerable to their operations that were not guided by regulation.

He said that was why many financial sector regulators, prominent financial institutions including global banks, and investment firms were moving swiftly against the cryptocurrency operators.

Gwadabe stated, “All over the world, no regulatory institution has given a fiat approval of the new digital money due to its vulnerability to money laundering and counter terrorism financing.

“It is therefore the belief of our association that the measures of the CBN will ensure confidence of our foreign partners to boost economic growth.”

According to the ABCON boss, rather than criticising the CBN, the nay sayers should have advised government to introduce digital agri-business to Nigeria’s teeming youth for capacity and self-employment.

“We therefore support the CBN measures and urge the apex bank to support a paradigm shift in Bureaux de Change business where we are moving from traditional bricks and mortar operations to a digitised model that boosts transparency, foreign capital inflows and  ease of monitoring and supervision of our operations,” he said.

According to Gwadabe, the BDCs has so far introduced four factors authentication digital applications in their operations to improve efficiency and transparency in operations.

The applications include SAAS MASTERS for rendition of utilisation of returns to CBN online real time; many BDCs are in the Nigeria Financial Intelligence Unit GOAML platform for suspicious and cash transactions reports, he said.

He noted that the BDCs were on the Nigeria Interbank Settlement System Bank Verification Number validation portal of their members and finally, ABCON was also working with Data Pro Consultant to integrate its new Application Programming Interface for politically exposed persons and sanction list search.

Gwadabe said every player in the financial sector should be regulated, and where such regulations were not available, caution should be applied.

“There is need for every segment of the financial system to be regulated and guided by the CBN Act, BOFIA, Anti-Money Laundering and Counter Financing Terrorism guidelines, Know Your Customer requirements for a safe and secured Nigeria and stable financial system,” he said.

He said ABCON would continue to support CBN’s moves to tighten and strictly enforce regulations in the foreign exchange market for sustained exchange rate stability and improved economic growth.

Gwadabe said ABCON leadership backed the CBN’s ongoing clampdown on cryptocurrency trading and believes that money laundering through the channel or any other financial institutions is unacceptable and those found wanting should be punished based on the law.

Source: naijanewstalk.com

Author: NaijaNewsTalk Staff


Elon Musk and Snoop Dogg Push Cryptocurrencies to Record Highs

Elon Musk and Snoop Dogg Push Cryptocurrencies to Record Highs

Bitcoin and even Dogecoin, which began as a playful experiment, are soaring in value as billionaires, companies and celebrities promote the digital currencies.

A Bitcoin A.T.M. in Marseille, France. The value of various cryptocurrencies has been surging this year.

SAN FRANCISCO — Bitcoin hit a new high above $47,000 on Monday, shooting up more than 45 percent from the beginning of the year.

Other digital currencies — with names like Terra and Solana — also rose sharply in value.

Even Dogecoin, a cryptocurrency that began as a joke with a perpetually surprised Shiba Inu dog for its symbol, has soared almost 1,000 percent over the last week to set a record.

The rally is a moment of euphoria for the thousands of different versions of digital money, which years ago were dismissed as little more than online Beanie Babies caught in a speculative bubble. While cryptocurrencies often rise and fall together, the latest surge stands out for its magnitude — for the first time, the value of all cryptocurrencies skyrocketed above $1 trillion over the last month — as well as the number of people who are using the digital tokens for practical purposes and the major players who are getting involved.

On Monday, the ostensible reason for the rally was an announcement from Tesla, the electric car company run by Elon Musk, the world’s richest person. Tesla said that it had bought $1.5 billion of Bitcoin and would begin accepting Bitcoin payments, setting off a frenzy of interest.

But the underlying momentum for a spike has been slowly building for about a year. Over that period, PayPal has joined other consumer apps that allow their users to buy, hold and sell cryptocurrencies. Some of the biggest hedge fund operators in the world — like Paul Tudor Jones and Stanley Druckenmiller — have also put money into the new market, in a sign that they increasingly view cryptocurrencies as an asset like gold.

“It’s just a sea change in sentiment,” said Meltem Demirors, the chief strategy officer at CoinShares, a cryptocurrency asset manager. “We went from being mocked and ridiculed to having the richest man in the world talking about it.”

Image

Elon Musk’s car company Tesla announced on Monday that it had bought $1.5 billion of Bitcoin.

The rally follows a recent frenzy over the stock of the video-game retailer GameStop, which was also driven up by social media memes and Mr. Musk’s joking tweets. Joshua Gans, a professor studying innovation at the University of Toronto’s business school, said both run-ups feature a new generation of investors who have had a lot of time on their hands in the pandemic and have had few attractive options for spending their money. As a result, they have become more interested in investments being talked about online, he said.

Buying and trading stocks and cryptocurrencies have also become simpler and more accessible, Mr. Gans said. Square and the trading app Robinhood have both introduced cryptocurrency and stock trading over the last few years. Last year, PayPal also added cryptocurrencies to its app, widening the audience.

“People haven’t had surplus cash before and time on their hands to ‘learn’ about trading,” Mr. Gans said. Now stocks and cryptocurrencies are “easier to ‘buy’ into than ever.”

Cryptocurrencies began appearing in 2009 after someone known as Satoshi Nakamoto — whose real identity has never been revealed — released the rules and software for Bitcoin. The virtual currency, which has no physical backing, could be sent electronically from one user to another, anywhere in the world. Bitcoin was run by a decentralized network of computers that keeps track of all transactions, so it could not be controlled by a government or company.

Bitcoin was initially described as a way to pay for things online. But the need for transactions to run through the decentralized system made it slow for payments.

Over time, investors became more interested in Bitcoin because it was not controlled by any government or company. The software that sets the rules for Bitcoin also allows only 21 million Bitcoin to ever be created, so it was a scarce resource.

Those qualities have created periods of boom and bust for Bitcoin and other digital currencies. In 2017, after a rapid run-up, the price of Bitcoin crashed. But since the coronavirus pandemic, a new set of powerful investors and companies have entered the market.

They have included hedge fund operators like Mr. Tudor Jones and Mr. Druckenmiller, as well as Ray Dalio, the founder of Bridgewater. While Mr. Dalio expressed skepticism about Bitcoin last November, he published an essay last month after further study describing the cryptocurrency as “one hell of an invention.” He added that he was considering putting money into Bitcoin.

Other Bitcoin proponents include Jack Dorsey, the chief executive of Twitter and Square. Square invested $50 million in Bitcoin late last year. And Mr. Dorsey, whose profile on Twitter is #bitcoin, has often tweeted about the qualities of virtual currencies.

Last year, Michael Saylor, the chief executive of the software company Microstrategies, also put cash on his company’s balance sheet into Bitcoin. He has since watched it triple in value to around $3 billion, according to the site Bitcointreasuries.org. Mr. Saylor has said he made the move because he believes the value of traditional currencies will fall over time, making Bitcoin’s scarcity more valuable.

“For anything that anybody invested in as a store of value, it starts to look like it is better to move that into Bitcoin,” Mr. Saylor said in November.

Mr. Musk has talked with Mr. Saylor on Twitter in recent months about imitating that strategy. Then in a filing on Monday, Tesla said it had bought $1.5 billion of Bitcoin to “maximize returns on our cash.”

Mr. Musk has stoked the fever around cryptocurrencies through other tweets. Last month, Mr. Musk followed Mr. Dorsey by changing his Twitter profile to #bitcoin. He removed that description a few days ago, but has posted other encouraging — and sometimes cryptic — messages about virtual currencies.

He has also talked up Dogecoin, a coin created in 2012 as a playful experiment to let people try out the technology. Over the past month, Mr. Musk has gone from posting cryptic jokes about Dogecoin (“One word: Doge”) to semi-serious arguments for why it might be taken seriously (“Doge appears to be inflationary, but is not meaningfully so”).

Other celebrities then took up the Dogecoin cause with their own viral tweets. On Saturday, the rapper Snoop Dogg responded to a tweet from Mr. Musk with a picture of himself as Snoop Doge.

Beyond people chasing the latest online joke, more are using cryptocurrencies for more serious purposes. Ethereum, the second most valuable digital token, has spawned applications that allow new kinds of financial transactions. Unlike Bitcoin, which only supports the storage and movement of money, Ethereum makes it possible to use a computer network for more complicated kinds of computation and transactions.

One popular application running on Ethereum, called Aave, enables people to lend and borrow cryptocurrencies, with interest payments moved directly between users without any financial company involved.

As of Monday, the system had over $5 million in outstanding lending, according to the site DefiPulse. Ethereum also hit a high on Monday of $1,776, according to Coinbase, up 134 percent since the beginning of the year.

“Back in 2017 people were just buying anything that was on sale,” Ms. Demirors said. “Now people know what they are buying and they are asking smart questions. This feels very different.”

Michael J. de la Merced and Ephrat Livni contributed reporting.

Source: www.nytimes.com

Author: By


Why many countries reject Cryptocurrencies, by CBN

Why many countries reject Cryptocurrencies, by CBN

The Central Bank of Nigeria (CBN) on Sunday said Nigeria is not the only country where Cryptocurrency is outlawed.

It explained that many other countries, central banks, international financial institutions, and investors and economists have also warned against its use.

They include China, Canada, Taiwan, Indonesia, Algeria, Egypt, Morocco, Bolivia, Kyrgyzstan, Ecuador, Saudi Arabia, Jordan, Iran, Bangladesh, Nepal and Cambodia, all of whom have all placed a certain level of restrictions on financial institutions facilitating cryptocurrency transactions.

The apex bank said the countries had also all made similar pronouncements based on “significant risks” that transacting in cryptocurrencies portend, such as the risk of loss of investments, money laundering, terrorism financing, illicit fund flows and criminal activities.

It noted that in China, for example, cryptocurrencies are completely banned and all exchanges closed as well. Banks and other financial institutions are not allowed by law to transact or deal with cryptocurrencies.

“China’s Central Bank, called the Peoples Bank of China (PBoC), has provided several directives ruling out the use of these currencies. The PBOC views cryptocurrencies as illegal because they are not issued by any recognised monetary institution and do not hold any legal status that can make them equivalent to money. Hence, banks and all stakeholders are strongly advised against their use as a currency,” the CBN said.

The apex bank defined cryptocurrencies as digital or virtual currencies issued by largely anonymous entities and secured by cryptography.

Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability, and regulation.

It said it did not place any new restrictions on cryptocurrencies, given that all banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, not to use, hold, trade and/or transact in cryptocurrencies. Indeed, this position was reiterated in another CBN Press Release dated February 27, 2018.

It explained that because they are issued by unregulated and unlicensed entities, cryptocurrencies use in Nigeria goes against the key mandates of the CBN, as enshrined in the CBN Act (2007), as the issuer of legal tender in Nigeria.

The CBN said: “In effect, the use of cryptocurrencies in Nigeria is a direct contravention of existing law. It is also important to highlight that there is a critical difference between a Central Bank issued Digital Currency and cryptocurrencies. As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities.

“Second, the very name and nature of “cryptocurrencies” suggests that its patrons and users value anonymity, obscurity, and concealment. The question that one may need to ask therefore is why any entity would disguise its transactions if they were legal?

“It is on the basis of this opacity that cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion.

“Indeed, many banks and investors who place a high value on reputation have been turned off from cryptocurrencies because of the damaging effects of the widespread use of cryptocurrencies for illegal activities.

“In fact, the role of cryptocurrencies in the purchase of hard and illegal drugs on the darknet website called “Silk Road” is well known. They have also been recent reports that cryptocurrencies have been used to finance terror plots, further damaging its image as a legitimate means of exchange.”

The apex bank stated further that some cryptocurrencies have become more widely used as speculative assets rather than as means of payment.

Youths under the aegis of Ethnic Youth Leaders of Nigeria backed the CBN’s move, saying it would help to checkmate financial criminals.

A statement on Sunday by the Ohanaeze Ndi’Igbo Youth Secretary-General and Head of Coalition Secretariat, Nwada Ike Chiamaka, in Abuja, said the move was both patriotic and courageous.

They urged the CBN to ensure that the policy is strictly implemented as well as sanction those who may violate the rule.

The Council, which is made up of the Arewa Consultative Youth Movement, Ohanaeze Ndi Igbo Youth Movement, Niger Delta Youth Council, Oduduwa Youths and Middle Belt Youths, viewed the ban as patriotic and courageous.

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Source: oluwagbemigapost.com


Elon Musk and Snoop Dogg Push Cryptocurrencies to Record Highs

Elon Musk and Snoop Dogg Push Cryptocurrencies to Record Highs

Elon Musk and Snoop Dogg Push Cryptocurrencies to Record Highs

SAN FRANCISCO — Bitcoin hit a new high above $47,000 on Monday, shooting up more than 45 percent from the beginning of the year.

Other digital currencies — with names like Terra and Solana — also rose sharply in value.

Even Dogecoin, a cryptocurrency that began as a joke with a perpetually surprised Shiba Inu dog for its symbol, has soared almost 1,000 percent over the last week to set a record.

The rally is a moment of euphoria for the thousands of different versions of digital money, which years ago were dismissed as little more than online Beanie Babies caught in a speculative bubble. While cryptocurrencies often rise and fall together, the latest surge stands out for its magnitude — for the first time, the value of all cryptocurrencies skyrocketed above $1 trillion over the last month — as well as the number of people who are using the digital tokens for practical purposes and the major players who are getting involved.

On Monday, the ostensible reason for the rally was an announcement from Tesla, the electric car company run by Elon Musk, the world’s richest person. Tesla said that it had bought $1.5 billion of Bitcoin and would begin accepting Bitcoin payments, setting off a frenzy of interest.

But the underlying momentum for a spike has been slowly building for about a year. Over that period, PayPal has joined other consumer apps that allow their users to buy, hold and sell cryptocurrencies. Some of the biggest hedge fund operators in the world — like Paul Tudor Jones and Stanley Druckenmiller — have also put money into the new market, in a sign that they increasingly view cryptocurrencies as an asset like gold.

“It’s just a sea change in sentiment,” said Meltem Demirors, the chief strategy officer at CoinShares, a cryptocurrency asset manager. “We went from being mocked and ridiculed to having the richest man in the world talking about it.”

The rally follows a recent frenzy over the stock of the video-game retailer GameStop, which was also driven up by social media memes and Mr. Musk’s joking tweets. Joshua Gans, a professor studying innovation at the University of Toronto’s business school, said both run-ups feature a new generation of investors who have had a lot of time on their hands in the pandemic and have had few attractive options for spending their money. As a result, they have become more interested in investments being talked about online, he said.

Buying and trading stocks and cryptocurrencies have also become simpler and more accessible, Mr. Gans said. Square and the trading app Robinhood have both introduced cryptocurrency and stock trading over the last few years. Last year, PayPal also added cryptocurrencies to its app, widening the audience.

“People haven’t had surplus cash before and time on their hands to ‘learn’ about trading,” Mr. Gans said. Now stocks and cryptocurrencies are “easier to ‘buy’ into than ever.”

Cryptocurrencies began appearing in 2009 after someone known as Satoshi Nakamoto — whose real identity has never been revealed — released the rules and software for Bitcoin. The virtual currency, which has no physical backing, could be sent electronically from one user to another, anywhere in the world. Bitcoin was run by a decentralized network of computers that keeps track of all transactions, so it could not be controlled by a government or company.

Bitcoin was initially described as a way to pay for things online. But the need for transactions to run through the decentralized system made it slow for payments.

Over time, investors became more interested in Bitcoin because it was not controlled by any government or company. The software that sets the rules for Bitcoin also allows only 21 million Bitcoin to ever be created, so it was a scarce resource.

Those qualities have created periods of boom and bust for Bitcoin and other digital currencies. In 2017, after a rapid run-up, the price of Bitcoin crashed. But since the coronavirus pandemic, a new set of powerful investors and companies have entered the market.

They have included hedge fund operators like Mr. Tudor Jones and Mr. Druckenmiller, as well as Ray Dalio, the founder of Bridgewater. While Mr. Dalio expressed skepticism about Bitcoin last November, he published an essay last month after further study describing the cryptocurrency as “one hell of an invention.” He added that he was considering putting money into Bitcoin.

Other Bitcoin proponents include Jack Dorsey, the chief executive of Twitter and Square. Square invested $50 million in Bitcoin late last year. And Mr. Dorsey, whose profile on Twitter is #bitcoin, has often tweeted about the qualities of virtual currencies.

Last year, Michael Saylor, the chief executive of the software company Microstrategies, also put cash on his company’s balance sheet into Bitcoin. He has since watched it triple in value to around $3 billion, according to the site Bitcointreasuries.org. Mr. Saylor has said he made the move because he believes the value of traditional currencies will fall over time, making Bitcoin’s scarcity more valuable.

“For anything that anybody invested in as a store of value, it starts to look like it is better to move that into Bitcoin,” Mr. Saylor said in November.

Mr. Musk has talked with Mr. Saylor on Twitter in recent months about imitating that strategy. Then in a filing on Monday, Tesla said it had bought $1.5 billion of Bitcoin to “maximize returns on our cash.”

Mr. Musk has stoked the fever around cryptocurrencies through other tweets. Last month, Mr. Musk followed Mr. Dorsey by changing his Twitter profile to #bitcoin. He removed that description a few days ago, but has posted other encouraging — and sometimes cryptic — messages about virtual currencies.

He has also talked up Dogecoin, a coin created in 2012 as a playful experiment to let people try out the technology. Over the past month, Mr. Musk has gone from posting cryptic jokes about Dogecoin (“One word: Doge”) to semi-serious arguments for why it might be taken seriously (“Doge appears to be inflationary, but is not meaningfully so”).

Other celebrities then took up the Dogecoin cause with their own viral tweets. On Saturday, the rapper Snoop Dogg responded to a tweet from Mr. Musk with a picture of himself as Snoop Doge.

Beyond people chasing the latest online joke, more are using cryptocurrencies for more serious purposes. Ethereum, the second most valuable digital token, has spawned applications that allow new kinds of financial transactions. Unlike Bitcoin, which only supports the storage and movement of money, Ethereum makes it possible to use a computer network for more complicated kinds of computation and transactions.

One popular application running on Ethereum, called Aave, enables people to lend and borrow cryptocurrencies, with interest payments moved directly between users without any financial company involved.

As of Monday, the system had over $5 million in outstanding lending, according to the site DefiPulse. Ethereum also hit a high on Monday of $1,776, according to Coinbase, up 134 percent since the beginning of the year.

“Back in 2017 people were just buying anything that was on sale,” Ms. Demirors said. “Now people know what they are buying and they are asking smart questions. This feels very different.”

Michael J. de la Merced and Ephrat Livni contributed reporting.

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Author: news360world


CBN: Cryptocurrencies Are Too Risky For Nigerians

CBN: Cryptocurrencies Are Too Risky For Nigerians

The Central Bank of Nigeria (CBN), in a statement addressed to members of the public, said cryptocurrencies are too risky for Nigerians.

Giving reasons to why it prohibited banks across the country from trading in cryptocurrencies, CBN said amongst other reasons, cryptocurrencies promote illegality and its risks are high.

The CBN stated, “The recent regulatory directive became necessary to protect the financial system and the generality of Nigerians (including the youth population) from the risks inherent in crypto assets transactions, which have escalated in recent times, with dire consequences for the integrity of the financial system and financial stability.

“Due to the fact that cryptocurrencies are largely speculative, anonymous, and untraceable they are increasingly being used for money laundering, terrorism financing and other criminal activities.

“Small retail and unsophisticated investors also face a high probability of loss due to the high volatility of the investments in recent times.

“In light of these realities and analyses, the CBN has no comfort in cryptocurrencies at this time and will continue to do all within its regulatory powers to educate Nigerians to desist from its use and protect our financial system from activities of fraudsters and speculators.”

Read Also: What’s The Big Deal About Cryptocurrency?

The CBN said for those who were not conversant with the universe of cryptocurrencies, it was important to state that cryptocurrencies “are digital or virtual currencies issued by largely anonymous entities and secured by cryptography.”

It stated, “Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability, and regulation.

“While there are a number of cryptocurrencies now in circulation, Bitcoin was the first to be introduced in 2009, and now accounts for about 68 percent of all cryptocurrencies.

“As regards our recent policy pronouncement, it is important to clarify that the CBN circular of February 5, 2021, did not place any new restrictions on cryptocurrencies, given that all banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, not to use, hold, trade and/or transact in cryptocurrencies.

“Indeed, this position was reiterated in another CBN press release dated February 27, 2018.”

Read Also: CBN: #EndSARS Protesters Are Terrorists

The CBN said its position on cryptocurrencies was not an outlier as many countries, central banks, international financial institutions, and distinguished investors and economists had also warned against its use.

It stated that they had all made similar pronouncements based on the significant risks that transacting in cryptocurrencies portend which include risk of loss of investments, money laundering, terrorism financing, illicit fund flows, and criminal activities.

It stated that China, Canada, Taiwan, Indonesia, Algeria, Egypt, Morocco, Bolivia, Kyrgyzstan, Ecuador, Saudi Arabia, Jordan, Iran, Bangladesh, Nepal, and Cambodia had all placed a certain level of restrictions on financial institutions facilitating cryptocurrency transactions.

Source: newsrand.com

Author: Published 1 day ago on February 8, 2021

By Tunde Osunfemi


Apple positioned to offer cryptocurrencies - RBC report

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