Nigeria’s upper chamber has turned its searchlight on the trade of bitcoin and other cryptocurrencies in the country. This was raised in a motion by Benjamin Uwajumogu, the Senator representing Imo North constituency.
The Senate also mandated the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), as well as the Nigerian Stock Exchange (NSE) to embark on enlightenment campaigns on the risks involved in their trade. In addition, the Senate’s Committee on Banking and other Financial Institutions has also been instructed to look into the viability of bitcoin, and possible regulations of its trade. CBN Governor Godwin Emefiele had last week likened the trading in cryptocurrencies to gambling.
Why is the Senate interested ?
The upper chamber joins countries around the world that have expressed concern about trading of cryptocurrencies. Regulators have struggled to draw boundaries because they are unsure about classifying cryptocurrencies as an asset or a currency. The absence of regulation has also led to several unscrupulous characters raising funds through Initial Coin Offers and disappearing with them. Several exchanges across the world have also been hacked.
The warning may fall on deaf ears
Nigerians have embraced trading of cryptocurrencies due to the massive profits that were made last year. Bitcoin which is the biggest coin by market capitalization surged from $1000 to $10,000 last year. Clamping down on trading bitcoin and other cryptocurrencies, will only drive markets underground and encourage ponzi schemes the Senate is trying to prevent.
There is more to cryptocurrencies
Though the senate’s concerns are reasonable, trading of cryptocurrencies is just one part of an emerging industry. Blockchain, the underlying technology on which bitcoin and other cryptocurrencies run can be applied to various aspects of the economy. The various exchanges in the country also employ staff, especially in the ICT industry. Know Your Customer (KYC) and Anti Money Laundering (AML) regulations are also applied.
Meet Theta Fuel, the cryptocurrency that catches world’s attention
TFUEL/USD was trading about $0.0026 on May 20th. Just 5 days later, it blew the chart by gaining a whopping 630% to about $0.019
The surge of Theta Fuel (TFUEL), which is used to power little transactions and operations on its own type of blockchain designed for sharing video bandwidth, has taken the crypto world by storm.
According to the data obtained from Coinmarketcap, TFUEL was trading at about $0.0026 on May 20th. Just 5 days later, it blew the chart by gaining a whopping 630% at a peak $0.019 before it fell to $0.016229 at about 11 am Nigerian local time on Tuesday.
TFUEL is presently the 83rd most valuable cryptocurrency in the world with a market capitalization of about $66.4 million.
What is Theta Fuel? It is a cryptocurrency with its own type of blockchain. It can also be described as the operational token of the Theta protocol. Individuals use Theta Fuel to complete transactions like interacting with or deploying smart contracts.
How to buy Theta Fuel? Theta fuel can be bought indirectly on most cryptocurrency exchanges like Binance and Coinbase. You will need to already possess an Ethereum or Bitcoin (BTC) to trade with.
The Theta blockchain project recently explained the completion of the Theta Mainnet 2.0 platform upgrade, saying that the network had improved massively. Theta’s statement read:
“Community-run Guardian Nodes will now take a direct role in block production, finalizing blocks at regular 100 block intervals, and making up the second layer of defence after the Validator Nodes that produce each block.
“With Guardian Nodes joining the network and staking, no single group or entity will control the majority of THETA staked, marking a significant milestone toward Theta’s decentralization.”
Meanwhile, America’s elite bank Goldman Sachs has indicated its interest in cryptocurrencies. On May 27th, it will be talking about Bitcoin to clients, teaching them all they need to know about the cryptocurrency.
Sharmin Mossavar-Rahmani, Goldman Sachs’ head of Investment Strategy Group and chief investment officer for Wealth Management, will be the host; she is in charge of overseeing the bank’s asset allocation, overall strategic and tactical investment strategy.
— Mike Dudas (@mdudas) May 22, 2020
Did Satoshi Nakamoto cause the panic sell-off in Bitcoin market
Bitcoin plunged to as low as $8,750 and other digital coins recorded similar falls, with most major digital coins losing between 5% and 10%
Bitcoin plunged to as low as $8,750 on Monday morning, according to data obtained from coinmarketcap, before it rebounds to around $8,826, by 8.30am, Nigerian local time.
Bitcoin and other digital coins recorded similar falls, with most major digital coins losing between 5% and 10%, and losing more than $10 billion from the total cryptocurrencies market value.
The specific cause for this sell-off was not clear, although the cryptocurrency market appeared to be affected by old bitcoin tokens worth about $500,000 moving for the first time in years.
What you need to know about Satoshi Nakamoto: Bitcoin was created in 2008 by an unidentified individual or group using the name Satoshi Nakamoto, in 2009. The source code was released as open-source code. The coins are designed as a reward for a process known as mining.
(READ MORE: Why Nigerians’ are attracted to bitcoin)
“While it is unclear if it was [bitcoin’s mysterious creator] Satoshi Nakamoto, it is likely to be a very early-stage adopter of the crypto-asset, and the timing of the rumors themselves appear to be the source of yesterday’s flash crash,” eToro market analyst, Adam Vettese wrote in a note to investors.
Also bitcoin’s price pattern showed a mixed picture with one widely-respected cryptocurrency analyst, Quantum Economics’ founder Mati Greenspan, warning that the bitcoin price could plunge a lot further.
“We’re now sitting at the top of a long-standing wide range, the bottom of which could easily be $6,000 or even $4,000 per bitcoin,” Greenspan wrote in a note, adding that he thought there was “a fair chance” of the market turning around and “blasting through $10,000” per bitcoin.
Nigerians’ love for cryptocurrencies on the rise, as it offers cheaper ways to transfer funds
Nigerians do have a high passion for digital currencies and are among the greatest users of cryptocurrencies in the world.
In 2019 Google Trends, Lagos, Nigeria was the number one city based on online search volumes for Bitcoin worldwide. While recently, in May 2020, Arcade Research ranked Nigeria fifth globally with its 11% of connected Nigerians owning or using cryptocurrencies.
In addition, data obtained from Coinmarketcap recently revealed the largest cryptocurrency users around the world, with Nigeria surging by 46% among its youth users. As a country, it gains stood Nigeria Up 211%.
These trends have shown that Nigerians do have a high passion for digital currencies and are among the greatest users of cryptocurrencies in the world. This is based on a major fact that Nigerians are using cryptos to avoid expensive and heavily bureaucratic money transfer systems currently available. Many Nigerians rely on remittances for their daily activities and any way of making the process effective cheaper would be of great benefit to them, this is where Bitcoin comes in
What you need to know: Cryptocurrency is basically, a digital currency based on an innovative technology called the blockchain. Its users range from small businesses to process payments, financial tech-based startups, and retail consumers that use it to send money across the border and as an investment asset.
Consequently, Asia’s arguably most popular cryptocurrency exchange listed Nigeria’s Naira to be first African currency supported on its Binance P2P platform, The Binance CEO said:
“We no longer need to bank the unbanked. We can empower them with cryptocurrency financial services directly. Nigeria is a vibrant innovation hub with a great passion for cryptocurrencies. We strive to provide the easiest cryptocurrency access and best trading service for the African community, and P2P trading is a more flexible approach, giving users the freedom to choose their payment methods and counterparty in a trade.”
However Nigeria’s central bank issued a statement about three years ago banning the use of bitcoin for transaction purposes, this statement was sent to all banks in Nigeria warning them against facilitating the trading of cryptocurrencies but that seems not to pause Nigerians growing love for cryptocurrencies.