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Cryptocurrency

Most powerful financial leader takes side with CBN, says Bitcoin is untrustworthy

U.S Treasury Secretary Janet Yellen took sides with CBN, by warning investors and the public of the dangers of owning bitcoin.

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Janet Yallen

The world’s most powerful financial leader, Janet Yellen, took sides with the Central Bank of Nigeria (CBN) by warning investors and the public of the dangers of owning Bitcoin.

The U.S Treasury Secretary and custodian of the $20 trillion economic juggernaut, raised her concern that the world’s most popular crypto asset could be ideal for money laundering and illicit transactions.

“I don’t think that bitcoin … is widely used as a transaction mechanism,” she told CNBC’s Andrew Ross Sorkin at a DealBook conference. “To the extent, it is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”

READ: Nigerian banks allegedly close accounts dealing with Crypto

The Nigerian central bank, some weeks back, spoke on the fact that some of these cryptos were issued by unregulated and unlicensed entities which begged the question of legality. It also claimed that cryptocurrencies had been used to finance several illegal activities including terrorism and money laundering.

“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,” the CBN said in a statement.

At the time of drafting this report, Bitcoin traded at $52,040.95 with a daily trading volume of $90.6 Billion. Bitcoin is down 8.55% for the day.

The CBN had earlier disclosed that a significant amount of people used it for speculative purposes rather than payment, citing the flagship crypto model as an example.

READ: NESG’s allegations, malicious attempt to tarnish the economic recovery program- CBN

“More also, repeated and recent evidence now suggests that some cryptocurrencies have become more widely used as speculative assets rather than as means of payment, thus explaining the significant volatility and variability in their prices.

“Because the total number of Bitcoins that would ever be issued is fixed (only 21 million will ever be created), new issuances are predetermined at a gradually decelerating pace,” the CBN said.

Taking the same side with Africa’s most powerful financial regulator, Yellen raised concerns about its usual high price swings that often come to cost some investors their fortune.

“It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer,” Yellen said.

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READ: How Senators reacted to CBN’s crypto ban

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Nigeria’s apex bank re-emphasized its responsibility to protect investors from a high probability of losses that might arise from dealing in cryptos.

The CBN said it would continue to educate Nigerians on the disadvantages of cryptos in the financial system.

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“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 their use and protect our financial system from the activities of fraudsters,” the Nigerian apex bank said.

READ: CBN’s Open banking regulation creates opportunity to usher in the next big FinTechs

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The former U.S Fed Chief however believed that a new digital currency, along with a payments system, would come into play in the coming years.

“I think it could result in faster, safer, and cheaper payments, which I think are important goals,” Yellen said.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina or email [email protected] He is a Member of the Chartered Financial Analyst Society.

3 Comments

3 Comments

  1. Mr One

    February 23, 2021 at 1:40 pm

    Why have they not ban crypto in US like NG Govt. did, well they are busy collecting tax on crypto, that last time I checked paying 35% on any crypto gain is the policy in US, they talk from 2 side of their mouth. BTC can’t be trusted but collecting tax from it is good.

  2. Zebadiah

    February 23, 2021 at 4:56 pm

    She have not explained the advantages of cryptocurrency,

  3. Beverley Smith

    February 23, 2021 at 9:32 pm

    Interesting comments by Yellen, is this an indication that they intend to regulate crypto currency trading in the US, as they introduce new a digital $ currency or currencies as the fiat dollar comes to the expected demise?

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Cryptocurrency

Cardano running on hot steam, bounces above $1 mark

Cardano at the time of writing this report was trading at $1.047324, up 20.35% on the day.

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Cardano, the sixth most valuable crypto is enjoying impressive gains amid record-buying pressure from crypto investors.

At the time of writing this report, Cardano was trading at $1.047324, up 20.35% on the day. It was the digital currency’s biggest one-day percentage gain since February 20, 2021.

Such appreciation sighted in the fast-rising crypto asset, pushed Cardano’s market value to $32.38 billion, or 2.10% of the total cryptocurrency market value. At its highest, Cardano’s market cap was pegged at $35 million.

READ: Cardano flying on a record high amid top American singer’s buy

Cardano had traded in a range of $0.899630 to $1.047324 for the day.

Over the past seven days, Cardano has seen a rise in value, as it gained 21.56%. The volume of Cardano traded for the day at the time of writing, was $10.583078 billion or 4.48% of the total volume of all cryptocurrencies.

It has traded in a range of $0.8115 to $1.1971 in the past 7 days.

Highly revered crypto analyst/trader, Michaël van de Poppe also recommended the fast-rising crypto asset.

READ: Bitcoin more valuable than any global bank

In a video (titled “Cardano Breaks $1 But $10 Is Possible In This Bull Cycle! Here’s Why!”) released recently the crypto pundit told his followers on Youtube channel that:

“Cardano going towards $10 is not that weird to calculate from here, especially given the fact, and I’ve been saying this in the past week multiple times, especially given the fact that Cardano and mostly all the Bitcoin pairs are just barely waking up. So there’s still much more to gain for the Bitcoin pairs.”

  • Cardano (ADA) lately has been tipped to outperform, on the bias that it is headed towards its smart contract launch last month, leading to a significant amount of applications built on Cardano in 2021.
  • This means that more developers will see it as an attractive medium for building their desired apps.

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Billionaire Watch

Elon Musk’s SpaceX is exploring the merits of buying Bitcoin

SpaceX, a company founded by Elon Musk is exploring the merits of buying Bitcoin, according to MicroStrategy CEO, Michael Saylor.

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Elon Musk needs $20 billion wealth gain to clinch world's richest man title

MicroStrategy CEO, Michael Saylor, has revealed that SpaceX, a company founded by Elon Musk, is exploring the merits of buying Bitcoin.

Saylor revealed that top representatives from SpaceX were among 7,000 companies represented at MicroStrategy’s recent Bitcoin seminar, which the leading business intelligence company organized to aid companies interested in buying Bitcoin as a treasury asset.

READ: Bitcoin bounces back after losing $13,000 in a space of 2 days

“We had people from SpaceX there. We had people [from] some of Elon Musk’s companies. We had people from Marathon there.

“The ones you would expect were there, but of course, there’s an avalanche of private companies, and there were a decent number of public companies and treasurers and CFOs that were lurking.

“Some don’t want to have their names mentioned, as you can imagine, because it’s a sensitive topic,” Saylor said.

READ: Panic in crypto market as over $140 billion got wiped off

However, a significant number of traditional finance experts are not buying into the flagship crypto bullish run, as they see little value in the digital currency on the account that they believe Bitcoin, and other leading cryptos are just part of a larger speculative bubble.

Recent reports suggest SpaceX raised another $850 million this month from a group of leading institutional investors led by Sequoia Capital.

  • Such investment now puts SpaceX’s valuation at $74 billion, a 60% jump from August, and helped boost Musk’s net worth by about $11 billion, according to the index.
  • A November 15, 2016 filing with the Federal Communications Commission revealed that the tech billionaire owned 54% of SpaceX.

READ: Tesla loses $200 billion in market value following Bitcoin investment

Micheal Saylor has always been a strong fan of the world’s most popular crypto asset and he thus shares the bias that companies can use Bitcoin to hedge against future fiat inflation and allow them to plug into a revolutionary and superior monetary network.

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