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Central Bank of Nigeria Warns About Investing in Cryptocurrencies Again

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Central Bank of Nigeria Warns About Investing in Cryptocurrencies

The Central Bank of Nigeria has again warned Nigerians against investing in cryptocurrencies, highlighting that they are not legal tender in the country.

In a statement released in Abuja, the CBN said cryptocurrencies such as bitcoin, litecoin, and ripple were unlicensed and unregulated by it. Furthermore, the bank said NairaEX, one of the most popular bitcoin trading platforms in Nigeria, was also unlicensed and unregulated.

“Dealers and investors in any kind of cryptocurrency in Nigeria are not protected by [the] law, thus [they] may be unable to seek legal redress in the event of failure of the exchanges or collapse of the business,” Isaac Okoroafor, acting director of corporate communications stated.

The recent statement contradicts reports from last year where the central bank seemed to be softening its stance towards cryptocurrencies. The bank was reported to be working on a whitepaper for virtual currencies and to have assigned researchers to study these currencies.

“We cannot stop the tide of waves generated by blockchain technology and its derivatives. Currently, we have taken measures to create four departments in the institution that are looking forward to [harmonising] the whitepaper on cryptocurrency,” CBN deputy director, Musa Jimoh, said.

On January 12, 2017, CBN released a circular signed by Kevin Amugo, the director of fiscal policy and regulation department to banks and other financial institutions in Nigeria. The circular acknowledged virtual currencies were being traded on unregulated exchange platforms globally. The circular also noted the untraceable and anonymous nature of virtual currency transactions, which makes them open to criminal activities such as funding terrorism and money laundering.

Central Bank Warnings Have Been Issued Across Africa

Several central banks have issued warnings against cryptocurrencies, letting its citizens know that they are at risk of incurring losses by investing in volatile digital currencies. The Tanzanian Central Bank has even warned against bitcoin stating that is a threat to the East African Community’s currency plans.

The Central Bank of Kenya (CBK), the Central Bank of Egypt, and the Bank of Uganda have also issued warnings against cryptocurrencies. However, the Kenyan central bank has recently also shown a more positive interest in the blockchain.

 

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Zimcoin Launches New Cryptocurrency Exchange in Zimbabwe

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Zimbabwean blockchain technology company, Zimcoin, has launched a new digital currency exchange that will allow users to buy and sell bitcoin (BTC).

The Future of Zimcoin

Zimcoin hints at the possibility of much larger projects in the future with its bitcoin exchange acting as a gateway:

“At Zimcoin we want to provide Zimbabweans with access to the new decentralised internet. Bitcoin acts as a gateway to all the exciting projects happening in the cryptocurrency and blockchain world. Whether you want to engage with the prediction markets of Augur or invest in the Decentralised Autonomous Organisation Decree, Bitcoin is a great starting point. Here at Zimcoin, we provide a platform to buy and sell Bitcoin, as well as a place to find out about the blockchain projects we are excited about. So what are you waiting for? Sign up today and become a pioneer in Zimbabwe’s love affair with Blockchain.”

When Golix was operating in Zimbabwe they faced minor incidences of security breaches and scares. It seems that Zimcoin is learning from their mistakes and trying to avoid that from the start.

ZimcoinZimcoin has already implemented two-factor authentication from day one, unlike Golix which only implemented a few years after operating. With Zimcoin’s 2FA you are given two options; an email or using Google Authenticator. Though the email is less secure than Google authenticator, you do not have to download a separate application.

The exchange also logs out after a period of inactivity, which means incidents such as someone getting access to your computer because you’ve gone out are also unlikely as well.

The Challenges of Cryptocurrencies in Zimbabwe

Earlier this year, the Reserve Bank of Zimbabwe had classified operations by cryptocurrency exchanges as illegal in the country. This greatly affected Golix, Zimbabwe’s largest crypto exchange, despite them winning interim relief.

According to a report by TechZim, Zimcoin is not overly concerned by this ban and say that they had been in communication with the RBZ since last year and feel that they will be able to operate without any trouble.

Meanwhile, Zimbabwe is struggling with its economy, and as its foreign reserves dwindle, which will likely positively affect Zimcoin’s growth as more Zimbabweans start to look towards other currency alternatives. 

Despite all the challenges Zimbabwe faces with cryptocurrencies, the blockchain is gaining popularity in Zimbabwe. This is good news for companies like Zimcoin as they will hopefully face fewer problems than their predecessors.

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Bank of Zambia (BoZ) Warns Against Using Cryptocurrencies

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The Zambia central bank, Bank of Zambia (BoZ), has cautioned citizens about the use of digital currencies as they are not considered legal tender.

According to local media, the Bank of Zambia has received an increasing amount of inquiries about cryptocurrencies, which is a testament to the growing interest in bitcoin and its peers in the Southern African nation.

Bank of Zambia

The central bank highlighted that there is no legal recourse for cryptocurrency holders or investors who lose money in this new digital asset class due to its unregulated nature.

Additionally, the Bank of Zambia stated that it does not oversee, supervise nor regulate cryptographic currencies and assets and that any actions in related to cryptocurrencies are performed at the user’s own risk.

This statement echoes that of most African countries’ regulators when it comes to bitcoin regulations.

In most of Africa, central banks are taking a wait and see approach to blockchain technology and cryptocurrencies in an attempt not to stifle innovation.

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Binance Uganda Officially Launches and is Starting to Accept Deposits

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Binance Uganda
Images by Binance Uganda

In a statement on its website, Binance Uganda announced that is officially opening its doors on October 17, 2018, when it will start accepting deposits in Ugandan shillings (UGX), bitcoin (BTC) and ether (ETH).

Uganda’s First Local Fiat-to-Crypto Exchange

Binance Uganda is the first local fiat-to-crypto exchange in the East African nation and marks a milestone in Binance’s push into the African market.

Binance UgandaBinance Uganda users can now complete full account verification and are able to start depositing funds in UGX, BTC and ETH starting from 2018/10/17 10:00 AM Uganda Time (EAT).

The first available trading pairs on Binance Uganda will be BTC/UGX and ETH/UGX trading pairs. The start time for trading will be released in a later announcement.

Until the launch of Binance Uganda, local bitcoin investors had very limited options to convert their shillings into bitcoin or other digital assets and vice versa.

Peer-to-peer trading platforms such as LocalBitcoins and Paxful have failed to take off in Uganda and international exchanges do not accept Ugandan shillings as a currency, which has left Ugandans to largely trade via WhatsApp and Telegram on a peer-to-peer basis.

With the launch of Binance Uganda, it will be interesting to see how the local cryptocurrency community evolves and whether bitcoin and ether will be accepted as legitimate investment assets by the country’s wider investor base.

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