Unmask NG understands that last year (2020), the Nigerian citizenry took to different parts of the country to express their displeasure at the way men of the Nigeria Police Force (NPF), especially those of the defunct Special Anti-robbery Squad (SARS), a notorious unit of the police force known for wanton arrests, extra-judicial killings, assaults, and harassments, were making life unbearable for them to live.

As part of their demonstration, the #EndSARS protesters secured funding from donors through various channels, amongst which is cryptocurrency.

Shortly after the infamous Tuesday, October 20, 2020, massacre, the apex bank started to clamp down on #EndSARS protesters, as it froze the bank accounts of the campaign leaders.

However, speaking on the clampdown in an interview on Arive TV monitored by Unmask NG, Emefiele explained that CBN’s disapproval of cryptocurrency transactions in Nigeria is because of its illegality, and not #EndSARS as widely claimed.

While maintaining that Nigeria’s banking space would not support cryptocurrency, Emefiele noted that even in most developed countries, the digital asset was yet to be fully adopted.

His words: “As you said, the #EndSARS issue came up in October 2020 and we came up with the issue of saying that we would not make our banking and payment system space available to those who were involved in cryptocurrency business because we feel that a substantial portion of the transactions going on there are illegal.

“Look at it this way: what is there to hide? Why are the transactions so hidden? Why are they encrypted? If I conduct a transaction and a regulator or security authority wants to see the nature of the transaction, those (transactions) can’t be encrypted for people to know what happened.  It means that cryptocurrency is a product that is embedded in high level of illegality.

“ENDSARS has nothing to do with it. It so happened that some people used their cryptocurrency to fund it but it has nothing to do with it (CBN’s stance).

“In fact, I have not seen more than one or two countries that have supported cryptocurrencies. You will not find developed economies or economies where high level of payment standards is put in place where the government is serious about tackling money laundering; you won’t find central banks in those climes supporting cryptocurrency.”

The post Emefiele: Crypto Ban Has Nothing To Do With #EndSARS appeared first on Business News in Nigeria.

While almost all intricacies are pointing to the fact that putting money in cryptocurrency is smart, there are quite a number of factors that proves otherwise.

But first, what is crypto?

Unmask NG understands that cryptocurrency is an online payment system that enables the exchange of goods and services via the web. As seen in many cases, companies issue their own currencies, which is often called tokens, and these can be traded specifically for the good or service that such companies provide.

Supported by the blockchain technology, cryptocurrency can be used to buy goods and services, but with the help of an online ledger with strong cryptography to secure online transactions.

The volatility of the crypto ecosystem

Going by precedents, Cryptocurrencies are not stable as far as their values are concerned. This is why many investors see them as mere speculations and not real investments. The investors believe that just like real currencies, cryptocurrencies generate no cash flow, so for you to profit, someone has to pay more for the currency than you did.

As NerdWallet writers have noted, cryptocurrencies such may not be that safe, and some notable voices in the investment community have echoed the sentiment, as they advised would-be investors to steer clear of them.

Of particular note, revered investor and billionaire, Warren Buffett compared bitcoin to paper checks, when he stated: “It’s a very effective way of transmitting money and you can do it anonymously and all that.”

A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?” he queried.

So, those who see cryptocurrencies as the currency of the future may have a rethink, because ordinarily, a currency needs stability so that merchants and consumers can determine what a fair price is for goods. Bitcoin and other cryptocurrencies have been anything but stable throughout much of their history. For instance, while Bitcoin traded at close to $20,000 in December 2017, its value then dropped to as low as about $3,200 a year later. By December 2020, it was trading at record levels again.

Upshot

One of the major challenges of cryptocurrency is the price volatility, which creates a conundrum not only for the ecosystem but investors too. Think about this — If bitcoins might be worth a lot more in the future, people are less likely to spend and circulate them today, making them less viable as a currency. Why spend a bitcoin when it could be worth three times the value next year?

The post Why Cryptocurrency Is A Bad Idea appeared first on Business News in Nigeria.