ADVERTISEMENT
The Sun Nigeria
  • Home
  • National
  • Columns
    • Broken Tongues
    • Capital Matters
    • Diabetes Corner
    • Duro Onabule
    • Femi Adesina
    • Frank Talk
    • Funke Egbemode
    • Insights
    • Kalu Leadership Series
    • Kunle Solaja
    • Offside Musings
    • PressClips
    • Public Sphere
    • Ralph Egbu
    • Shola Oshunkeye
    • Sideview
    • The Flipside – Eric Osagie
    • Tola Adeniyi
  • Business
  • Politics
  • Entertainment
  • The Sun TV
  • Sporting Sun
No Result
View All Result
  • Home
  • National
  • Columns
    • Broken Tongues
    • Capital Matters
    • Diabetes Corner
    • Duro Onabule
    • Femi Adesina
    • Frank Talk
    • Funke Egbemode
    • Insights
    • Kalu Leadership Series
    • Kunle Solaja
    • Offside Musings
    • PressClips
    • Public Sphere
    • Ralph Egbu
    • Shola Oshunkeye
    • Sideview
    • The Flipside – Eric Osagie
    • Tola Adeniyi
  • Business
  • Politics
  • Entertainment
  • The Sun TV
  • Sporting Sun
No Result
View All Result
The Sun Nigeria
No Result
View All Result
Home Business

Opacity in cryptocurrency dangerous –CBN

8th February 2021
in Business
0
Opacity in cryptocurrency dangerous –CBN
0
SHARES
211
VIEWS
Share on FacebookShare on Twitter

From Uche Usim, Abuja

The Central Bank of Nigeria (CBN) on Sunday explained the opacity in cryptocurrency transactions remain dangerous to the economy, stressing the need it directed banks to desist from it.
Mr Osita Nwanisobi, the Acting Director, Corporate Communications of the apex bank explained that there is a critical difference between a Central Bank issued digital currency and cryptocurrencies.
“As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities.
“Second, the very name and nature of “cryptocurrencies” suggests that its patrons and users value anonymity, obscurity, and concealment. 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.
“Indeed, many banks and investors who place a high value on reputation have been turned off from cryptocurrencies because of the damaging effects of the widespread use of cryptocurrencies for illegal activities. In fact, the role of cryptocurrencies in the purchase of hard and illegal drugs on the darknet website called “Silk  Road” is well known.

“They have also been recent reports that cryptocurrencies have been used to finance terror plots, further damaging its image as a legitimate means of exchange.
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.
This limited supply has created a perverse incentive that encourages users to stockpile them in the hope that their prices rise. Unfortunately, with a conglomeration of desperate, disparate, and unregulated actors comes unprecedented price volatility that have threatened many sophisticated
financial systems. In fact, the price of ether, one of the largest cryptocurrencies in the world, fell from US$320 to US$0.10 in June 2017.

 

The price of Bitcoins has also suffered similar
volatilities”, he stated.
Explaining further, he said: “Given that unlike Fiat Money which accompanied by full faith and comfort of a country or
Central Bank, cryptocurrencies do not have any intrinsic value and do not generate returns
by themselves. When one buys a stock, say of a conglomerate in the Nigeria Stock Exchange, its price reflects the activity and production of that conglomerate and the value people place on their goods and/or services. This price may rise as the conglomerate produces better goods/services and probably gains greater market share. The reverse would be true if the conglomerate does not innovate to improve the quality of its goods/services. In
other words, the price of that stock reflects market fundamentals. In contrast, cryptocurrencies do not have fundamentals and would never have fundamentals. Investors only buy in the hope that its use and acceptability will rise, thereby pushing up its demand”, Nwanisobi stated.
He revealed that several other initiatives were being implemented to further support FinTech development and creation of jobs. These include regulatory sandbox and open banking principles that the Bank recently implemented.
Central Banks, international financial institutions, and distinguished investors
and economists have also warned against its use. They have all made similar pronouncements based of the significant risks that transacting in cryptocurrencies portend-risk of loss of investments, money laundering, terrorism financing, illicit fund flows and
criminal activities. China, Canada, Taiwan, Indonesia, Algeria, Egypt, Morocco, Bolivia,
Kyrgyzstan, Ecuador, Saudi Arabia, Jordan, Iran, Bangladesh, Nepal and Cambodia have all
placed certain level of restrictions on financial institutions facilitating cryptocurrency
transactions.
In China, for example, cryptocurrencies are completely banned and all exchanges closed as well. Banks and other financial institutions are not allowed by law to transact or deal with
cryptocurrencies. China’s Central Bank, called the Peoples Bank of China (PBoC) has
provided several directives ruling out the use of these currencies. The PBOC views
cryptocurrencies as illegal because they are not issued by any recognized monetary
institution and do not hold any legal status that can make them equivalent to money. Hence
banks and all stakeholders are strongly advised against their use as a currency.

Cyril

Cyril

Related Posts

Youth Corper wins car in Access Bank Transact and Win promo
Business

Youth Corper wins car in Access Bank Transact and Win promo

26th February 2021
Stop buying, selling under high tension cable, IBEDC warns
Business

Nigeria to disconnect Niger, Benin over N2.60bn electricity debt

26th February 2021
Nigeria generated $500m from cashew production in 2018 –Minister
Business

Ogun revives dormant imasayi cashew processing plant 

26th February 2021
Next Post
I don’t have Twitter, Facebook accounts – Sunday Igboho

Igboho and Nigeria’s shaky unity

MMCC, Port of Antwerp to construct $2.9bn Escravos Seaport Industrial Complex

I‘ll use my position to attract devt to Bayelsa, N’Delta- Sylva

With Sylva’s new task, Nigeria’s ratings get a boost

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Highlights

BREAKING! Gunmen kidnap female students in Zamfara

Buhari gives bandits red card, rules out amnesty

Coach Izilien demands N10.9m unpaid bonuses from NFF

Hennessy becomes NBA’s first global spirits partner

Liverpool goalkeeper’s dad drowns in Brazil

Okoro elected Captain of Ikoyi Club Golf Section

Trending

IGP appoints new police commissioners for Ekiti, Ogun, Cross Rivers, Bayelsa
Cover

Suicide: Police recover bodies of two lovers in Delta

26th February 2021
0

  Ben Dunno, Warri Policemen attached to the Enerhen Division under the Delta state Police Command, have...

SSANU, NASU suspend 3-week-old nationwide strike

26th February 2021
3 die, 18 injured as suicide bomber strikes Maiduguri

BREAKING! Gunmen attack police station in Imo, police woman wounded

26th February 2021
Barbara Bush

BREAKING! Gunmen kidnap female students in Zamfara

26th February 2021
Buhari locks down Lagos, Abuja, Ogun as coronavirus spreads

Buhari gives bandits red card, rules out amnesty

26th February 2021

Follow us on social media:

Categories

  • Abuja Metro
  • Arts
  • Broken Tongues
  • Business
  • Business Week
  • Cartoons
  • Citizen Joe
  • Columns
  • Cover
  • Culture
  • Duro Onabule
  • Editorial
  • Education Review
  • Effect
  • Elections
  • Entertainment
  • Events
  • Features
  • Femi Adesina
  • Food & Drinks
  • Frank Talk
  • Funke Egbemode
  • Gallery
  • Global Square by Kenneth Okonkwo
  • Health
  • Insights
  • Kalu Leadership Series
  • Kunle Solaja
  • Kunle Solaja
  • Letters
  • Lifeline
  • Lifestyle
  • Literary Review
  • Marketing Matters
  • Muiz Banire
  • National
  • News
  • Offside Musings
  • Opinion
  • oriental news
  • Politics
  • Press Release
  • PressClips
  • Public Sphere
  • Ralph Egbu
  • Shola Oshunkeye
  • Sideview
  • South-west Magazine
  • Sponsored Post
  • Sporting Sun
  • Sports
  • Sun Girl
  • Tea Time
  • The Flipside – Eric Osagie
  • The Sun Awards Live
  • The Sun TV
  • Thoughts & Talks
  • Time Out
  • Today's cover
  • Tola Adeniyi
  • Travel
  • Travel & Tourism
  • Trending
  • TSWeekend
  • Turf Game
  • Uncategorized
  • Updates
  • Views from Abroad
  • Voices
  • World
  • World News
  • Home
  • About Us
  • Paper Ad Rate
  • Online Ad Rate
  • The Team
  • Contact Us
  • Privacy Policy

© 2019 The Sun Nigeria - Managed by Netsera.

No Result
View All Result
  • Home
  • National
  • Columns
    • Broken Tongues
    • Capital Matters
    • Diabetes Corner
    • Duro Onabule
    • Femi Adesina
    • Frank Talk
    • Funke Egbemode
    • Insights
    • Kalu Leadership Series
    • Kunle Solaja
    • Offside Musings
    • PressClips
    • Public Sphere
    • Ralph Egbu
    • Shola Oshunkeye
    • Sideview
    • The Flipside – Eric Osagie
    • Tola Adeniyi
  • Business
  • Politics
  • Entertainment
  • The Sun TV
  • Sporting Sun

© 2019 The Sun Nigeria - Managed by Netsera.

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist