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Nigerian Regulatory Body to Monitor Cryptocurrency Risks More Closely

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Nigerian Regulatory Body

Nigeria is keen on developing its digital currency but will closely monitor the risks that could possibly arise from it says the Nigeria Deposit Insurance Corporation (NDIC).  

Nigerian Regulators And the Blockchain

Speaking about ‘the evolution of virtual currency,’ Kabir Katata, Deputy Director of the Research Department, NDIC, made these intentions known. The NDIC is responsible for protecting depositors’ funds and ensure the safety and soundness of the Nigerian banking system.

buy bitcoin in nigeriaKatata said: “Banks and government agencies are already exploring how blockchain might transform their approaches to operations.” He added that the Nigerian regulators and private sector companies are actively involved in digital currencies and distributed ledger technology (DLT).  

According to him, “[Nigeria] should continue to monitor developments in digital currency so as to resolve any concern on legal, financial and consumer protection.”

Worried about Risks

Katata goes on to explain that financial regulators worry about the risks that come with digital currencies. The fact that it is also a relatively new technology for financial institutions is unsettling.

“Digital currencies, though a new phenomenon, is gaining popularity across the globe and are associated with a lot of risks. That is why regulatory/supervisory authorities in many countries are seriously concerned about DCs,” he stated.

The associated risks have extensive implications for deposit insurance, banking, and legal practice said the Deputy Director. He says even though cryptocurrencies do not pose financial stability risks, they still raise notable concerns. Some of them include consumer and investor protection, market integrity and money laundering/terrorist financing.

“Blockchain, the technology that powers DCs, has economic, political, humanitarian, and legal system benefits and could have the capacity for reconfiguring all aspects of the society and its operations,” he added.

One small step for Nigeria

In recent months the Nigeria Deposit Insurance Corporation and other bodies have issued warnings against investing in this unregulated market. However, with this announcement, there seems to be an acceptance of the digital currencies. This may be because of Nigerians investing heavily in the crypto market despite the warnings given.

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South African Online Payments Processor PayFast Drops Bitcoin

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PayFast Drops Bitcoin

South African online payment gateway PayFast will cease supporting bitcoin payments from July 20, 2019, due to high transaction fees and long confirmation times. The company expressed its frustrations through an announcement on its website.

Bitcoin’s Current Limitations

PayFastAlthough digital currency is meant to make online transactions cheaper, faster, and convenient, PayFast observed that bitcoin’s current limitations have made it difficult for the company to offer it as an alternative to traditional payment methods.

“Unfortunately, there are a number of limitations and design flaws unique to Bitcoin that make it an impractical substitute for cash, including high transaction fees and long confirmation times for buyers. We have tried various ways to mitigate these problems, but unfortunately, these issues are fundamental. The resultant poor user experience has led us to re-evaluate Bitcoin as a payment method on our platform and a decision has been taken to discontinue support for Bitcoin from midnight 20 July 2019,” PayFast explained.

The PayFast platform has a ten-minute window for the confirmation of bitcoin payments. However, the Bitcoin network has failed, in most cases, to confirm payments within this time period resulting in unsuccessful transactions. The Bitcoin network can currently not handle the volume of transactions it gets at a faster speed, PayFast noted.

Luno has been enabling bitcoin payments on the PayFast platform by acting as an intermediary. “To eliminate any risk posed by bitcoin’s price volatility, Luno locked the bitcoin to ZAR exchange rate for a ten-minute window. If the transaction was not sufficiently confirmed within ten minutes, the payment was unsuccessful and a refund would be due,” PayFast said.

The Bitcoin network can only handle seven transactions per second compared to VISA’s 24,000. This limits bitcoin’s usefulness as a means of exchange and an asset. Moreover, users making payments using bitcoin risk incurring non-refundable processing fees when the transaction fails.

Despite these challenges, the Lightning Network promises to improve bitcoin transactions by making them instant, low-cost, scalable, and acceptable across different platforms.

PayFast Remains Open to Cryptocurrency

PayFast hopes that as this space continues to grow, cryptocurrencies will be able to handle faster payments.

“We are eagerly following the developments of cryptocurrencies and the supporting technologies that are aiming to enable faster payments. As soon as these become workable alternatives, we look forward to supporting cryptocurrencies as a payment method in the future,” the South African company stated. 

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Is Egypt Finally Warming Up to Bitcoin?

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Egypt Warming Up to Bitcoin

A new banking law has given the Central Bank of Egypt (CBE) the right to ban the establishment, promotion or operation of platforms issuing or trading cryptocurrencies without acquiring the required licenses. However, this move suggests that the country is softening its stance on bitcoin as it enables crypto startups to operate under an official license.

The New Banking Law

Best Cryptocurrency to Invest inAccording to an unnamed official source that spoke to MENA news agency, CBE’s Board of Directors has the right to regulate cryptocurrencies and demand for multiple licenses under the new draft bill. The draft bill acknowledges the importance of financial technology, keeping pace with global banking changes, and leveraging modern technology to provide financial and banking services.

“The new law provides legal authority for the electronic authentication of bank transactions, electronic payment orders, and transfer orders as well as for the electronic settlement of checks and the issuance and circulation of electronic checks and electronic discount orders provided that Board of Directors of CBE issue rules and procedures regulating all the aforementioned actions,” the source said.

Furthermore, these electronic means will have the same authenticity as original papers as long as they meet the set technical criteria, the source stated.

The new draft bill is not yet available for public reading.

Is Egypt Warming Up to Crypto?

In 2018, Egypt’s Grand Mufti Shawki Allam banned cryptocurrencies based on Islamic law that declared these currencies as potential threats to the current financial system and risky due to scams and extreme price fluctuations. Moreover, he disregarded cryptocurrencies, such as bitcoin, because they can be issued and used without the control of any governing authority.

The new law could be a sign that the country is warming up to cryptocurrencies as crypto firms continue to penetrate the North African market and as the CBE considers issuing a digital currency.

How easy or difficult it will be for crypto startups to register for licenses remains to be seen. However, it does signal a willingness by Egyptian authorities to talk with the industry as opposed to outright ban it as has been the case previously.

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Crypto.com Introduces Crypto Earn and Crypto Credit

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Crypto.com

Cryptocurrency platform Crypto.com has introduced Crypto Earn and Crypto Credit to enable users to earn interest on their coins and borrow by using digital currency as collateral.

Crypto Earn And Crypto Credit

Crypto Earn is a financial product that allows users to earn as much as eight percent per annum in interest on their cryptoasset holdings.

Crypto.comTo do this, users deposit digital assets into Crypto Earn through the Crypto.com app and then begin accumulating interest each day through their preferred cryptocurrency. To get started with Crypto Earn, users will have bitcoin, Paxos, and TrueUSD to choose from, according to a company press release.

Crypto.com is offering users two fixed periods namely one-month and three-month terms to earn interest on digital assets. The company will soon provide users with a flexible holding term. With Crypto Earn, you can also withdraw and deposit coins at no fees and spend what you earn.

Crypto Credit gives users instant loans with bitcoin as collateral. Users are free from fixed repayment schedules, monthly fees, payment deadlines, and late fees which financial institutions such as banks often impose. Users, therefore, enjoy a flexible repayment schedule in the twelve months from the beginning of the credit term.

Furthermore, users owning MCO tokens staked in the app receive a special rate of eight percent per annum. Users can use their loans to buy more cryptocurrencies on the app or they can spend it on the MCO Visa Card with cash back of up to five percent.

Other benefits of using Crypto Credit are that you do not require credit checks and that you can get the credit limit you want.

“Crypto Earn offers the most attractive interest rates in the market today. With the MCO Visa Card and Crypto Credit, we are uniquely positioned to do it while maintaining sustainable unit economics. MCO Visa Card, Crypto Earn, and Crypto Credit together form a powerful product suite that nobody else in the industry has today. We have never been more excited about the potential of our platform and look forward to continue scaling it globally later this year,” said Kris Marszalek, co-founder and CEO of Crypto.com.

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