The Association of Bureau De Change Operators of Nigeria (ABCON) has asked the Central Bank of Nigeria (CBN) to introduce measures that will neutralize the positive effects of cryptocurrencies as a channel for diaspora remittances.

This is to redirect diaspora remittances away from cryptocurrency exchanges to official channels and also protect such against potential disruptions.

This call was made by ABCON during its Quarterly Economic Review for the first quarter of 2021 where it commended the CBN for the N5/$ rebate scheme introduced to encourage diaspora Nigerians to use official channels to remit their funds.

However, the association noted that the apex bank needs to address other issues driving the patronage of cryptocurrency exchanges for remittance transfers.

What ABCON is saying in their statement

The association in its statement said, “It is noteworthy that public acceptability for cryptocurrency exchanges are rising which could be quite accountable for the wide drop in diaspora inflows to Nigeria. Insecurity in the country is giving it greater prominence as investors and citizens are finding Cryptocurrency a safe haven for their wealth in case of any eventuality.

In most Emerging Markets Bitcoin transfers surged last year, as the pandemic exposed the cheaper and more efficient digital remittance services. Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.”

According to ABCON, “Cryptocurrency transactions are faster than the conventional transfers, which require passing through banks reliant SWIFT, the sluggish, half-century-old interbank messaging system that handles cross-border payments.

These exchanges override the political complications of official channels. The global reach of cryptocurrencies avoids the inflation risk inherent to official currencies, especially in politically unstable countries reliant on fickle foreign investors.

Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the IMTCs and the exchange rate. Strategies that satisfy the most sensitive of these advantages of Cryptocurrency exchanges must be introduced to redirect flows to the official channel.”

ABCON also expressed concerns over the country’s huge unemployment rate, urging the government to apply radical approaches with the use of both conventional and unconventional economic and political tools to redress the trend.

What you should know

• It can be recalled that the apex bank had about 2 months ago, warned the Deposit Money Banks, Non-Financial Institutions and other Financial Institutions against doing business in crypto and other digital assets.
• The CBN directed financial institutions to immediately close the accounts of persons or entities transacting in or operating cryptocurrency exchanges, warning of severe regulatory sanctions in the event of any breach of the directive.
• The Securities and Exchange Commission (SEC) had a few days ago, revealed that it is working with the CBN for a better understanding and regulation of cryptocurrencies in the country.

Stocks took a drive on Monday with Nasdaq plunging (-0.98%) at the end of the trading session. The S&P 500 decreased by (-0.53%) and the Dow made a gain of (-0.36%). After a Tesla vehicle suspected to be without a driver crashed into a tree north of Houston on Saturday, killing two passengers, the electric-car maker’s stock fell 3.4%.

The stock had the greatest negative impact on the S&P 500 and Nasdaq Composite Indexes. Tesla’s stock price was weighted down by an 8.4% plunge in bitcoin over the weekend, in which it has a stake.

The yield on 10-year Treasuries was at 1.58%, after falling six base points in the U.S. trading session.

READ: Elon Musk gains $19bn in 3 days, gap with Jeff Bezos shrinks to $4bn

• The stock of GameStop Corp soared 6.3% after the announcement of its CEO’s resignation.
• Nvidia’s stock fell 3.5% after the UK government announced it would investigate the national security ramifications of Nvidia’s $40 billion acquisition of British chip designer ARM Holdings, creating doubts about the transaction.

Top gainers  

1. Harley-Davidson up 9.68% to close at $44.29
2. Albemarle up 3.60% to close at $157.50
3. Morgan Stanley up 1.83% to close at $80.03
4. Charles Schwab up 1.76% to close at $65.88
5. Bank of NY Mellon up 1.61% to close at $46.81

READ: S&P 500 sets record highs on the back of tech stocks

Top losers

1. Altria down -6.17% to close at $49.08
2. Arconic down -6.07% to close at $26.02
3. Synopsys down -3.88% to close at $250.64
4. Cadence Design down -3.61% to close at $141.94
5. Broadcom down -3.51% to close at $462.00

READ: Wall Street dips in expectation of inflation report

Outlook

• As bitcoin suffered a beating over the weekend, crypto stocks like Riot Blockchain and Marathon Digital both fell more than 8%. Bitcoin was down 0.7% at the time of writing.
• Speculators are expecting a recovery as the market opens today.
• Nairametrics, however, advises cautious buying in this era of growing uncertainties.