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The Nigerian Deposit Insurance Corporation (NDIC) Warns Against Risk of Trading Bitcoin

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Nigerian Deposit Insurance Corporation

Nigerians have yet again been warned by the Nigerian Deposit Insurance Corporation (NDIC) of the risk of doing trade using digital currencies as they have not been authorised by the Central Bank of Nigeria (CBN).

Mohammed Umar, the Director of Research, Policy and International Relations at NDIC, while speaking in at a two-day annual workshop for Finance Correspondents and Business Editors in Kano titled ‘Financial disruption of digital currency and its consequences on the banking and deposit insurance system’, said that their corporation is not tasked with providing insurance covers for any risks related to cryptocurrency trading since they have not been issued by the CBN.

Mr. Umar said,

“The financial regulatory authorities are not playing catch up on the digital currency race in Nigeria. There is no country in the world that allows its citizens to use digital currencies as money not issued by the Central Bank. No Central Bank will accept digital currency as a substitute for its national currency or part of its monetary system when it is not able to control it. Nigerians must understand that adequate notice has been issued by all financial sector regulatory authorities, namely Central Bank of Nigeria, CBN and Nigerian Deposit Insurance Corporation, NDIC, to warn Nigerians who want to trade in bitcoins as gamblers.”

He added: “They can only do so at their own risk. The CBN cannot say anyone cannot trade with it and NDIC will not insure any trading in any currency not issued by the CBN.”

Monitoring of Digital Money Operators

An inter-agency committee that involves the Ministry of Justice, Economic and Financial Crimes Commission (EFCC), NDIC, Department of State Security (DSS), the Nigeria Police and other significant agencies has been formed to “sanitise the system”, said Mr. Umar.

With its secretariat at the CBN, the committee is expected to closely monitor all the activities of digital money operators to protect Nigerians from unnecessary risks involved with cryptocurrencies.

Mr. Umar went on to say,

“If you can buy a bitcoin, nobody will stop you. It is at your own risk. A bitcoin is not covered by the CBN rules, and NDIC will not insure it. We have consistently warned Nigerians that anyone who trades in bitcoin does so at his own risk.”

While stressing and warning Nigerians on the risks that come with bitcoins and other digital currencies and the fact that the NDIC and CBN have no control over them, he explained that even the Bank of England had discovered about 70 risks affiliated with digital currencies.

Cryptocurrencies in Nigeria

The statement came a few days before the 2017 Nigeria Blockchain Alliance Conference that was held in Lagos last week. The focus of the conference was to discuss blockchain technology and how cryptocurrencies can be used to uplift the economy in both Nigeria and Africa as a continent.

What is even more interesting is the fact that the Deputy Governor of Economy Policy, the Director for Banking and Payments, and the Chief Information Security Officer at the CBN were in attendance and spoke positively about the blockchain technology and digital currencies albeit stressing the need to have a proper regulatory framework for cryptocurrencies.

The NDIC’s warning comes at a time when Nigeria has been experiencing growing interest in the bitcoin space. Research conducted by the co-founder for Blockchain Solutions Limited, Lucky Uwakwe, shows that Nigerians trade close to ten billion nairas of cryptocurrencies each month. Nigeria also has more than ten bitcoin exchanges that people can use to buy and trade in bitcoin.

Bitcoin

Binance Launches Fiat-to-Crypto Exchange in Uganda

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Binance Launches in Uganda

Global bitcoin exchange Binance has launched a new fiat-cryptocurrency exchange in Uganda. The exchange will also be offering a reward of 0.5 BNB to the first 20,000 users that register on the site as part of its promotion in Uganda.

The announcement comes nearly two months after Binance partnered with Crypto Savannah, Made in Africa initiative, and Msingi East Africa to promote economic development in the East African country.

Changpeng Zhao and Yi He founded Binance in 2017 and raised $15 million through an initial coin offering for its ERC20 token BNB in July of the same year.

The exchange plans to move its offices to the island nation of Malta after the implementation of stricter regulations in China and Japan. In January 2018, Binance was the largest crypto exchange with a market capitalisation of $1.3 billion.

Binance in Uganda

BinanceBinance will also offer its Ugandan users a month of zero trading fees when trading goes online. The exchange will announce the opening for trading at a later date.

Users can find out if they have won any rewards by logging into their accounts and accessing ‘Distribution History’ in the Account Center. In addition, users will be required to complete ID verification to be able to withdraw funds from Binance.

Ugandan users will enjoy an exchange that offers fast transactions of up to 1.4 million per second and state-of-the-art storage technology for utmost security. The exchange also provides 24/7 customer support and has a user-friendly interface.

The presence of Binance in Uganda aims to boost financial inclusion in the country, which has increased from 28 percent in 2009 to 54 percent in 2013 according to its national financial inclusion strategy 2017-2022.

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LINE Corp to Launch Cryptocurrency Exchange BITBOX in July for Global Trading

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BitBox
Image by linecorp.com

The developers of popular messaging app LINE and LINE Group’s cryptocurrency and blockchain company LVC Corporation have announced that they are set to launch a new cryptocurrency exchange called BITBOX in July 2018. The Japan-based firm made the announcement during the LINE Conference 2018 held in Tokyo.

The New BITBOX Exchange

BITBOXBITBOX will offer over 30 high-demand cryptocurrencies to users globally with the exception of Japan and the US. The exchange will trade coins such as bitcoin, ether, litecoin, and bitcoin cash while charging low trading fees of 0.1 percent. BITBOX will support 15 languages, according to the company press release.

The selected cryptocurrencies for the exchange have undergone an extensive screening exercise and have been picked by an internal committee, promising users a convenient and safe trading experience. LINE will also incorporate its top security standards to the cryptocurrency exchange.

LINE Corporation CEO Takeshi Idezawa said:

“As a key part of LINE’s new financial services, BITBOX shows our commitment to fulfilling the growing demand for more diverse financial options. With BITBOX, LINE users will be able to access cryptocurrencies more easily, while also being assured of state-of-art security measures to protect their assets.”

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Nigerians Have Invested Over $5m in Cryptocurrencies Despite Regulator Warnings Says KureCoin Hub

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Nigerians Invest in Cryptocurrencies

Nigerians have invested over five million US dollars in the cryptocurrency market in the last couple of years according to data from Nigerian cryptocurrency platform KureCoin Hub.

The data shows that Nigerian retail investors are investing heavily in the cryptocurrency market despite warnings from the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) against investing in an unregulated market.

KureCoin Hub’s co-founder and CEO Tega Abikure has criticised the stance regulators have taken and argues that the country will lag behind as other countries enjoy the benefits of blockchain technology and cryptocurrencies. Abikure told New Telegraph:

“It is not a matter of whether the government likes it; it is about whether they need it. I am not sure the internet was liked when it first came. […] It is not a matter of whether they are going to embrace it; it is about when they are going to do so.”

Abikure observed that other countries such as Uganda and South Africa have already taken steps towards adopting blockchain technology while Kenya is pushing forward with a functioning blockchain taskforce.

“Nigeria is being left behind,” he noted.

The Blockchain as a Source of Foreign Direct Investments

Abikure also believes that blockchain technology could be a major source of Foreign Direct Investments (FDIs) in the next five to ten years. In addition, he is of the opinion that a lot of money is being made in cryptocurrencies on the continent with most of it leaving Africa’s economy.

On one of the benefits of blockchain technology, he said: “[The blockchain] is completely transparent and cannot be changed; it can be used to create a decentralised system of payment where the taxpayer had an unhindered access to the collector which is the government. It enhances revenue collection and removes the challenges of remittances.”

Blockchain technology can also improve the banking sector, the electoral process, the use of donations in charitable projects, and the supply chain, among many other use cases.

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