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Technology | BlockChain & Cryptos

CBN vs Cryptocurrency: The Gold Rush, Time for a Change?

Apr 14, 2021   •   by   •   Source: Proshare   •   eye-icon 1443 views

Wednesday April 14, 202/ 04:55 PM / By CSL Research / Header Image Credit: Sofi/Ecographics

 

Despite the Central Bank of Nigeria expressing its concernabout Cryptocurrency in Nigeria, the cryptocurrency space has continued to rollout ingenious solutions to real-world problems. One of the most recentsolutions via the platform is the advent of Non-Fungible Tokens (NFTs), a unitof data stored on a blockchain to certify that a digital asset is unique andnon-interchangeable. It is an innovation that allows that an artist getsdigitized title/ownership for their work. Based on a report from coinbaseyesterday, NFTs' adoption is fast growing among Nigerian creatives, given thatit provides a marketplace for creatives and art collectors across the globe.Although currently, the platform has recorded complaints from some artistswhose artworks were minted without their consent, the platform's potentialmarket for African creatives is undeniably massive.

 

Over time, the Nigerian creative industry has been quiet dueto perennial problems such as inadequacy of patronage and piracy, whichdisincentivizes players in the space. This problem, coupled with the apparentlow interest in other economic segments, led to Nigeria's currentoverdependence on oil receipt. Most creative deals in the Nigerian NFT spaceare currently being consummated anonymously. Furthermore, Nigeria being thesecond largest market for cryptocurrencies globally over the last five years,with a market worth of trade totalling 60,215BTC, portends an interestingfigure when the segments' potential proceeds are considered.

 

According to the National Bureau of Statistics, Nigeria has anunemployment rate of 33.3% as of Q4 2020. There is also the recent prohibitionof local banks from facilitating cryptocurrency transactions. As an offshoot,the NFL's ability to provide support to the economy in the area of rightlyengaging creatives and other providers of ancillary services in the segmentcould be frustrated. There are also indications that Nigeria might be settingitself up to miss out on an otherwise potent foreign exchange source. In an erawhere oil receipt is becoming increasingly unreliable, avenues like this couldprovide a decent level of support given Nigerians' tenacity and creativity,hence drawing more accretion to its external reserves.

 

It is undeniable thatCryptocurrency poses some downside concerns in how it could easily aid someundesirable ventures, such as money laundering and terrorism financing.Nonetheless, we noted that Authority's efforts should be geared more towardsfinding common ground where those concerns could be mitigated instead ofshutting down the entire space. Noteworthy is that the buying and selling of cryptocurrencieshave continued unabated since the last CBN's directives were issued. Is it timeto retract those directives and find a more effective way of combattingcryptocurrency concerns? Yes! However, we opine that as we advance, every moveshould be tailored to ensure Nigeria is not blindsided in this gold rush.

 

Proshare Nigeria Pvt. Ltd. 

 

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Proshare Nigeria Pvt. Ltd.

 

Proshare Nigeria Pvt. Ltd. 

 

Proshare Nigeria Pvt. Ltd. 

 

Proshare Nigeria Pvt. Ltd.

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