Daily Archives: July 13, 2021

UAE Central Bank Unveils Plan to Launch Digital Currency

UAE Central Bank Unveils Plan to Issue Digital Currency

The Central Bank of the United Arab Emirates has unveiled its plan to launch a digital currency as part of its 2023-2026 strategy to become one of the world’s top 10 central banks.

  • A growing number of central banks worldwide are working to launch central bank digital currencies (CBDCs). The Central Bank of the United Arab Emirates (CBUAE) revealed Monday its plan to issue a state-backed digital currency within the next five years.
  • The announcement was part of the central bank’s “2023-2026 strategy” to “position it among the world’s top 10 central banks.”
  • There are seven objectives in total, according to Gulf News. Among them was “issuing a digital currency and driving digital transformation in the UAE’s financial services sector, by utilizing the latest artificial intelligence and big data solutions.”

  • The UAE’s Securities and Commodities Authority (SCA) published its decision on cryptocurrency regulation on Nov. 1, 2020, after consulting with the crypto industry and the public. The document describes the SCA’s licensing regime for anyone wanting to offer crypto-related services within the UAE. It covers initial coin offerings (ICOs), exchanges, marketplaces, crowdfunding platforms, and custodian services.
  • Chainalysis’ Global Crypto Adoption Index published last September ranked the UAE fifth in the Middle East.

What do you think about the UAE central bank launching a digital currency in five years? Let us know in the comments section below.

New York Fed Survey Shows Inflation Expectations Highest Ever Recorded

American inflation expectations have surged according to the results of the latest New York Federal Reserve Survey of Consumer Expectations. The presumed inflation rate tapped the highest point since 2013 and alongside the forecast of lower purchasing power, consumer debt and fears of a housing bubble in the U.S. are on the rise.

New York Fed’s Consumer Expectations Report Expects Inflation to Be 4.8% Over the Next Year

U.S. citizens are worried about inflation after the government locked down the nation for more than a year and the Federal Reserve increased the M1 supply by 30%. Inflation has been so bad in recent times, American supermarkets are buying up to 25% more supplies to get ahead of inflation and higher supply chain costs that could arise.

From 2020 up until today, bacon is up 14%, bread is up 7%, milk increased by 8%, and oranges are up 8% as well. There’s been a significant rise in lumber costs, the cost of gas has jumped, and the real estate market is frothy from the likes of hedge funds and Wall Street types.

New York Fed Survey Shows Inflation Expectations Highest Ever Recorded Though the members of the U.S. Federal Reserve remarked inflation will only be “transitory,” the New York Fed said in its latest Survey of Consumer Expectations that inflation is expected to be 4.8% over the next 12 months. This metric is the highest level recorded since 2013 and the perception of an American’s state of personal finances has degraded.

“Perceptions about households’ current financial situations compared to a year ago deteriorated, with more respondents reporting to be worse off compared to a year ago,” the report notes. The New York Fed’s survey adds:

In contrast, respondents were slightly more optimistic about their households’ financial situations in the year ahead.

American Consumers Are Borrowing More, Uncertainty Range Around Next Year’s Housing Market the Highest Ever

Consumers surveyed by the New York Fed also had shown that the rate of borrowing either one or more types of credit has jumped to 45% in February 2021 from 35% in October 2020.

“The increase was broad-based across loan types and credit score groups, although it was largest for mortgage refinance applications,” the Survey of Consumer Expectations report notes. Despite the rising number of Americans looking for credit, the overall rejection rate for credit jumped to the highest recorded rate since October 2018.

New York Fed Survey Shows Inflation Expectations Highest Ever Recorded

Meanwhile, as stimulus money has run out, Peter Schiff’s web portal schiffgold.com published a report on how “Americans are whipping out their credit cards.” The Federal Reserve data from the report shows that consumer debt jumped 10% in May and the report stressed that “Americans collectively now owe $4.28 trillion in consumer debt.”

The numbers stem from debt instruments such as student loans, credit cards, and auto loans. The data does not include mortgages and the report shows that consumer debt figures increased by $35.3 billion in May.

The economist and gold bug Peter Schiff doesn’t believe the U.S. central bank will be raising interest rates anytime soon with the economy’s foundations solidified by borrowing.

“The reason that they are not going to fight inflation in the future is the same reason they’re not fighting it now — because they can’t do it without collapsing the economy,” Schiff said.

The New York Fed’s latest Survey of Consumer Expectations also shows that Americans may be concerned about the U.S. real estate market as consumers disclosed that home prices will remain seeing a steady increase at 6.2% per annum, but doubtfulness surrounding that outlook was the highest the New York Fed survey has ever recorded.

Americans are noticing that there are buyers out there today trying to bid on properties they have never seen or visited. In April, 47% of the homes listed in the U.S. moved to pending in less than seven days.

What do you think about the New York Fed’s latest Survey of Consumer Expectations hitting records in this series? Let us know what you think about this subject in the comments section below.

Whale From 2012 Transfers 740 Bitcoin Worth $26M After BTC Sat Idle for 9 Years

Whale From 2012 Transfers 740 Bitcoin Worth $26M After BTC Sat Idle for 9 Years

On July 12, an old whale from 2012 spent 740 bitcoin worth roughly $26 million at the time of transfer after nine years of choosing not to move the coins. The whale acquired the bitcoin on May 31, 2012, when the stash of crypto was only worth $3,700.

Old School Whale Moves 740 ‘Sleeping Bitcoins’

Bitcoiners noticed a whale move 740 bitcoin (BTC) on Monday after the coins sat idle for over nine years. The bitcoin sat for approximately 3,330 days as the BTC was acquired on May 31, 2012. The address saw life in the spring of 2012 and the wallet has been stacking small increments of BTC since the first large deposit of 740 BTC nine years ago.

Whale From 2012 Transfers 740 Bitcoin Worth $26M After BTC Sat Idle for 9 Years

At the time of acquisition, bitcoin (BTC) was trading for $5 per coin so the 740 BTC was worth $3,700. Today, however, the stash was worth over $26 million when it transferred on Monday.

The whale movement was caught by whale-alert.io that stated on Twitter that a “dormant address containing 791 BTC (26,147,621 USD) has just been activated after 9.1 years.” Roughly 640 BTC went to one address while 100 BTC went into another address according to blockchair.com’s transaction statistics.

Whale From 2012 Transfers 740 Bitcoin Worth $26M After BTC Sat Idle for 9 Years

The transaction hash and details show that the transfer was sent with a low privacy score rating (45 out of 100) according to Blockchair’s Privacy-o-meter. After the transfer sent the bitcoins to two addresses, the coins were then siphoned into a tree of BTC addresses.

Many Idle Whales From the Early Days Have Stirred in 2021

Whale sightings are a favorite pastime for bitcoiners and there’s been a lot of big moves this year. For instance, on June 9, Bitcoin.com News reported on the “mystery whale” from 2010, which has moved over 10,000 BTC that sat idle for over a decade.

Moreover, data shows that in the early days, a great number of people mined bitcoin alongside the crypto asset’s creator Satoshi Nakamoto. Last June, at block height 687,847 an old 2010 mining whale spent 100 BTC that sat idle for over ten years mined on July 15 and then the next day in 2010.

What do you think about the 2012 whale that moved 740 bitcoin on Monday? Let us know what you think about this subject in the comments section below.

Oldest US Bank BNY Mellon to Provide Grayscale Bitcoin Trust With Asset Servicing and ETF Services

Oldest US Bank BNY Mellon to Provide Grayscale Bitcoin Trust With Asset Servicing and ETF Services

Grayscale Investments has engaged the oldest bank in the U.S., BNY Mellon, to provide asset servicing for its bitcoin trust. The bank will also provide ETF services for the bitcoin trust upon its conversion to an exchange-traded fund (ETF).

Grayscale Teams up With BNY Mellon

Grayscale Investments announced Tuesday that it has selected the Bank of New York Mellon (BNY Mellon) as an asset servicing provider for Grayscale Bitcoin Trust (OTCQX: GBTC). The announcement explains:

Through this agreement, BNY Mellon will provide Grayscale Bitcoin Trust with fund accounting and administration effective October 1, 2021. Additionally, it is anticipated that BNY Mellon will provide transfer agency and ETF services for the Grayscale Bitcoin Trust upon its conversion to an ETF.

“The agreement will offer Grayscale improved scalability, resiliency, and automation through BNY Mellon’s market-leading platform,” the company claims.

Michael Sonnenshein, CEO of Grayscale Investments, commented: “Engaging BNY Mellon is an important milestone as part of our commitment to converting Grayscale Bitcoin Trust into an ETF.”

The oldest bank in the U.S., BNY Mellon is a global investments company with a presence in 35 countries. As of March 31, the bank had $41.7 trillion in assets under custody and/or administration, and $2.2 trillion in assets under management, according to its website. BNY Mellon set up a crypto unit to offer bitcoin services in February.

Roman Regelman, CEO of Asset Servicing and Head of Digital at BNY Mellon, opined Tuesday: “Providing essential fund administration services to the world’s largest digital currency asset manager further validates that BNY Mellon stands squarely at the intersection of trust and innovation.” He added:

It’s another critical milestone in our rapidly growing digital asset capabilities and broader strategy of putting client choice at the center of everything we do.

What do you think about Grayscale choosing BNY Mellon to provide asset servicing and ETF services for its bitcoin trust? Let us know in the comments section below.

S&P Dow Jones Launches 5 New Cryptocurrency Indices

S&P Dow Jones Launches 5 New Cryptocurrency Indices

S&P Dow Jones Indices, the world’s leading index provider, announced Tuesday the launch of five new cryptocurrency indices. The company now has eight cryptocurrency indices in total.

  • The first newly added index is the “S&P Cryptocurrency Broad Digital Market (BDM) Index,” which “provides a wide performance snapshot of the cryptocurrency market and includes more than 240 coins at launch,” the announcement details.
  • The other four new crypto indices are subsets of the BDM. The first of the four is the “S&P Cryptocurrency Largecap Index” which “measures the performance of the constituents with the largest market capitalization.”
  • The second subset is the “S&P Cryptocurrency BDM Ex-Megacap Index” which excludes the constituents of the S&P Cryptocurrency Megacap Index. The crypto megacap index measures the performance of bitcoin (BTC) and ether (ETH).
  • Another index being launched is the “S&P Cryptocurrency BDM Ex-Largecap Index” which excludes the constituents of the S&P Cryptocurrency Largecap Index.
  • The fifth index launched is the “S&P Cryptocurrency Largecap Ex-Megacap Index” which measures the performance of the constituents of the S&P Cryptocurrency Largecap Index, excluding the constituents of the S&P Cryptocurrency Megacap Index.

  • The new indices join three existing “S&P Digital Market Indices” launched in May. They are the “S&P Bitcoin Index,” “S&P Ethereum Index,” and the aforementioned “S&P Cryptocurrency Megacap Index.”
  • Peter Roffman, global head of Innovation and Strategy at S&P Dow Jones Indices, commented: “The expansion of our Digital Market Indices family gives one of the broadest snapshots yet of this rapidly growing asset class with the ability to slice and dice by market cap. We’re excited to bring this significant level of additional transparency to the cryptocurrency market.”

What do you think about S&P Down Jones launching 5 new cryptocurrency indices? Let us know in the comments section below.

Axie Infinity Game Tokens Skyrocket in Value, AXS and SLP Capture All-Time Price Highs

Axie Infinity Game Tokens Skyrocket in Value, AXS and SLP Capture All-Time Price Highs

While most digital currency markets are down in value, a token called axie infinity, the native coin tethered to the blockchain-based trading and battle game of the same title, has reached new price highs jumping to $21.55 on Tuesday. The Axie Infinity platform has seen massive demand in recent days, and other tokens from the gaming economy like “smooth love potion” have also seen significant buying pressure.

Axie Infinity Token Values Surge

Last week, Bitcoin.com News reported on the booming Axie Infinity economy, as the project’s non-fungible token (NFT) assets and its native token have skyrocketed in value. The project is basically an Ethereum-based game that also offers a digital marketplace and governance protocol.

The token, axie infinity (AXS), is leveraged for governance and other actions within the game. The game involves a battle between token-based creatures called “Axies,” and players can collect items, breed the creatures, and train them similarly to Pokemon or Hearthstone game characters.

Axie Infinity Game Tokens Skyrocket in Value, AXS and SLP Capture All-Time Price Highs
Data shows that the token axie infinity (AXS) tapped an all-time high on Tuesday morning (EDT), July 13, 2021.

On Tuesday morning (EDT), axie infinity (AXS) tapped an all-time price high at $21.55. The token has been on a market rampage in recent weeks, outpacing coins like BTC and ETH in terms of percentage gains. Seven-day statistics show AXS is up 86.72% against the U.S. dollar and 410.11% over the trailing 30 days.

Coingecko stats and nomics.com data show the market capitalization for AXS is around $1.3 billion and there’s $1.2 billion in 24-hour trade volume on Tuesday. At 0.00062 BTC per AXS, the axie infinity token has gathered 18.11% on Tuesday against bitcoin (BTC). Out of the thousands of cryptocurrencies in existence, Coingecko shows AXS holds the 74th position ranking on July 13.

Axie Infinity Game Tokens Skyrocket in Value, AXS and SLP Capture All-Time Price Highs
Smooth love potion (SLP) is also a token tied to the Axie Infinity economy and has seen major demand.

The attention lately has not just been focused on AXS, as the Axie Infinity economy’s other tokens are seeing demand as well. One specific token called smooth love potion (SLP) is one of the Axie Infinity tokens seeing buying pressure. Axie Infinity players can earn SLP as rewards and when they battle in the game’s adventure mode.

SLP too tapped an all-time high (ATH) on Tuesday morning, reaching $0.39 per unit on Binance. Besides earning and collecting SLP and AXS, the Axie Infinity economy’s tokens can be purchased and sold on exchanges like Uniswap, Binance, Bkex, Digifinex, and Huobi.

While the Play-to-Earn Structure Is Popular, Some Call It a Pyramid Scheme

The Axie Infinity universe was developed by a game studio created in 2018 called Sky Mavis. The game leverages a play-to-earn structure and players can collect rare Axies and breed them by leveraging SLP. Axie Infinity players earn more resources by competing in PVP battles hosted in the game’s adventure mode.

Players need to download the game, Ronin wallet and Ronin bridge to get started, and the web3 ETH wallet Metamask is also used to connect with the game. In addition to all those steps, users also have to have at least three Axies sold on the Axie marketplace to begin gaming.

Blockchain-based games have become very popular in recent times especially with the emergence of NFTs. With the play-to-earn structure, people can earn funds in the Axie Infinity economy but they still have to fork over some ether to get started.

For this reason, some people have begun to think of Axie Infinity as a borderline Ponzi scheme. “Is it just me or [does] Axie Infinity feel like a Ponzi/pyramid scheme?” one individual said on Twitter on Tuesday. Twitter is littered with comments from other individuals saying the same thing.

What do you think about the Axie Infinity blockchain gaming universe and the project’s associated tokens swelling in value? Let us know what you think about this subject in the comments section below.

Police Set New UK Record Seizing £180 Million Worth of Cryptocurrency

Police Set New UK Record Seizing £180 Million Worth of Cryptocurrency

Britain’s Metropolitan Police have seized a staggering £180 million in cryptocurrency as part of a money laundering investigation. The announcement comes just weeks after Scotland Yard confiscated £114 million in crypto, breaking the previous record.

UK Police Discover £180 Million in Crypto Linked to Criminal Transfers

Law enforcement officials in the U.K. have announced the seizure of a record amount of cryptocurrency during an ongoing investigation into international money laundering. Detectives said they confiscated almost £180 million (close to $250 million) worth of crypto without providing more details about the type of coins and how they were seized.

“This is believed to be one of the largest seizures globally and tops the £114 million confiscation made by the Met on Thursday, 24 June,” the U.K.’s Metropolitan Police Service (MPS) remarked in a press release published on its website Tuesday morning.

Police Set New UK Record Seizing £180 Million Worth of Cryptocurrency

Both seizures were conducted by members of the Economic Crime Command of the MPS, Scotland Yard noted. The investigators acted on intelligence received by the British police pertaining to the transfer of criminal assets.

“Less than a month ago we successfully seized £114 million in cryptocurrency. Our investigation since then has been complex and wide-ranging,” Detective Constable Joe Ryan commented, emphasizing that his colleagues have worked hard to trace the money and identify the criminality it may be linked to. He further said:

Today’s seizure is another significant landmark in this investigation which will continue for months to come as we hone in on those at the centre of this suspected money laundering operation.

As part of the investigation, police officers arrested a 39-year-old woman on June 24 who is suspected of money laundering offences. She was interviewed in relation to the discovery of the £180 million crypto stash on Saturday, July 10, and has since been released on bail until an unspecified date in late July.

Scotland Yard Improves Its Expertise in Cryptocurrency

Proceeds from crime can be laundered in many different ways, Deputy Assistant Commissioner Graham McNulty noted. And while “cash still remains king” in the criminal world, the development of digital platforms has increased the use of cryptocurrency to launder dirty money from organized crime.

Meanwhile, Scotland Yard has been improving its expertise in the field over the past few years and McNulty stated:

Whilst some years ago this was fairly unchartered territory, we now have highly trained officers and specialist units working hard in this space to remain one step ahead of those using it for illicit gain.

According to the law enforcement official, police detectives have put a lot of effort into tracing the millions of pounds worth of cryptocurrency in this latest case. “Those linked to this money are clearly working hard to hide it. Our investigation will stop at nothing to disrupt the transfer and identify those involved,” McNulty was quoted as saying.

What do you think about the massive crypto seizure announced by the British police? Let us know in the comments section below.

Vow Introduces the Next Step in the Evolution of Crypto-Based Currencies

Since the beginning of 2021, the cryptocurrency industry has experienced a marked surge in popularity, as institutions and individuals flock to the rapidly developing space in large numbers. Whilst the barrier to enter the space has significantly decreased since its birth a decade ago, there remain several sticking points which keep more widespread adoption difficult, particularly when it comes to interacting with local fiat currencies.

There is a need for an effective and efficient liquidity bridge between crypto currencies and merchants that will only become stronger as the industry develops. Additionally, the influx of new participants – most of which are retail investors or traders – is causing a heightened level of volatility, which is in danger of rendering the mass adoption of the industry in the mainstream financial world untenable. Even with the ballooning of the stablecoin space in response to these issues, it is not quite ready to appeal to those industries that might see the most benefit from their use; namely commerce. A solution is needed to accelerate acceptance of crypto currency and stablecoins, one which doesn’t fake crypto acceptance by merchants by automatically converting crypto to fiat using a prepaid card or a crypto to fiat gateway.

Enter Vow (R), a company developing an alternative to stablecoins, called vcurrencies. As opposed to being backed by money in a bank account, vcurrencies are backed by thousands of independent merchant promises. They exist in an ecosystem driving both local and global commerce and have an effect of promoting and increasing the use of blockchain-based assets for commerce. Indeed, vcurrencies are already in use in the background of reward programmes in 11 countries. By posting their transactions onto a level two scaling layer (operated by Aventus Network), these reward programmes have collectively processed 8.5 million historical transactions to date in advance of a public launch. This article will discuss Vow’s solution in depth. It will examine the company’s innovative new approach to stability, as well as explore the benefits of its fast-growing commerce ecosystem. But first, what is Vow and how does it work?

What is Vow and How Does It Work?

Vow’s mission is to decentralise currency issuance and establish itself as a universal bridge for merchant crypto acceptance all over the world. Vow’s unique approach targets the billions of dollars worth of “promises” merchants make to their customers in the form of vouchers, points, cashback and gift cards and tokenizing them brings a new form of liquidity into existence. Its tokens, which Vow calls “vcurrencies”, are fixed value discount tokens that merchants issue in place of their usual reward “promises”. Instead of $1 worth of gift cards, cashback or discounts, merchants simply reward their customers with $1 of vcurrencies instead. Customers then collect their vcurrencies and exchange them for a fixed discount on merchants’ goods of services at any time in the future.

As a result of being accepted against merchant goods and services, vcurrencies have equivalent utility; meaning they mirror local fiat equivalents in all respects when a customer is making a purchase from a given merchant. For example:

Product X from Merchant A costs $100 and comes with 20% cashback. When Customer A purchases Product X in exchange for fiat, they receive $20 worth of vcurrencies in their Vow wallet and can use that 20 vUSD to claim a $20 discount on their next purchase.

Vow’s “platform” exists as an ecosystem of merchants and customers, allowing those customers to spend their tokenized rewards at a wide choice of merchants, effectively establishing a localized currency. This means it is not e-money, neither is it classifiable as a stable coin, as it does not profess to carry any intrinsic value. In fact, it is a discount against goods and services.

Because it is merchants that issue vcurrencies to their customers, they stand behind it to protect the integrity of their brand. This also plays into the uniqueness of vcurrencies compared to traditional stablecoins as there is no central company, government, private party or asset which is used to support the tokens’ value at any time and consumers receive them completely free.

In contrast, each vcurrency retains 100% of its value, at a 1:1 equivalency with the local currency owing to the distributed merchant promises to accept them back in return for their goods and services.

In addition to vcurrencies themselves, the heart of Vow’s platform is a free-floating, limited-supply ERC777 cryptocurrency called VOW, which merchants will need to purchase in order to mint new vcurrencies. VOW’s value is directly reflective of the ecosystem’s adoption rate.

A Bridge Between Commerce and Crypto

Indeed, vcurrencies, VOW and the wider Vow ecosystem are destined to be critical tools for more mainstream cryptocurrency and blockchain-based technology adoption for several reasons:

  • The ecosystem gives businesses the ability to create a new pool of liquidity which not only makes it easier for local commerce to occur, but also supercharges industries that might otherwise find it difficult to establish themselves from the offset.
  • vcurrencies are fundamentally simple to understand from the consumer perspective, an important characteristic when it comes to convincing both merchants and customers to participate in the platform.
  • vcurrencies are truly decentralized and put the key stakeholders – merchants and customers – first. As a result, merchants can be fully confident of the ecosystem’s integrity.
  • Merchants will benefit financially as vcurrencies and the wider Vow ecosystem reduce fiat expenses and the cost of customer acquisition, resulting in more efficient cash flows.

Vow’s model embodies the shift towards an ecosystem-led approach in commerce – a trend which encourages businesses to build for all stakeholders, not just shareholders. The approach is fundamental to blockchain-based platforms and has resulted in a more equal distribution of benefits for similar projects in the crypto space.

Vow’s Chairman, Bishara Smeir, speaking about the need for merchant adoption, says:

“There is currently no significant demand for businesses’ to accept decentralised currency. Replacing existing vouchers and stored value products with vcurrency can be an easy step, into a wider decentralised world.”

How Do vcurrencies Compare Against Stablecoins?

Stablecoins – in contrast to free-floating cryptocurrencies like Bitcoin – are designed to keep their value stable. Traditionally, there have been two approaches:

  1. Tethering stablecoins to fiat currencies by holding an equivalent amount of currency in reserve,
  2. Linking the value of stablecoins to some basket of assets (crypto-based or otherwise) via an algorithm which adjusts a stablecoin’s value in response to changes in price of the items in that basket.

In commerce, however, both of these approaches include potential risks and may pose a threat to wide scale merchant adoption of crypto payments.

The first approach requires merchants to trust a third party is holding large quantities of fiat currency, which it can cash in. The reintroduction of third parties into transactions is counter to the ethos of blockchain. This is also an expensive task riddled with compliance issues in most developed economies.

The second algorithmic approach offers a positive step in the direction of decentralization. However, a reliance on volatile crypto-assets and a risk-reward strategy that maintains fiat parity, means stability in extreme market circumstances remains untested. vcurrencies are backed by products and services with the same unit value as their associated vcurrency, hence their value correlates perfectly thereby eliminating the risk of the collateral diverging in value from the asset it is backing.

Conclusion: Evolution by Experimentation

All of the above shows Vow’s commitment to expanding commerce through the application of blockchain-based technologies. However, at its core, Vow’s solution is fundamentally commercial and strategic in its implementation. Vow has examined critical issues in merchant-customer interactions and has applied a specific commerce-led solution which capitalizes on the innovative new field of blockchain and cryptocurrencies.

Indeed, this application is promoting the ongoing experiment of decentralization in mainstream industry, with Vow taking a clear lead. Vow’s unique merchant-led decentralized ecosystem approach will not only facilitate an increased pace of cryptocurrency and blockchain adoption in commerce, but will pave the way for much more innovation in the future, triggering an embrace of new technologies industry-wide.

For more on how Vow’s vcurrencies are leading in the quest to create a liquidity bridge between all cryptocurrencies and physical or online merchants, visit their main site here.


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Forex Shortages Force Nigerian Corporates to Turn to Parallel Market

Nigeria’s ongoing shortage of foreign exchange is forcing corporates and businesses to source this resource on the parallel market, a former official with the Lagos Chamber of Commerce and Industry (LCCI) has said. According to Muda Yusuf, who is the previous director-general at LCCI, these shortages stem from the foreign exchange market liquidity constraints that have been experienced in the first half of 2021.

Investment Risk

As noted in a report based on data from July 8, 2021, the turnover at one of Nigeria’s multiple official forex markets dropped by 24.5% to $526.79 million. The report adds that most of these trades were consummated at the exchange rate of “between N400 and N460 to the dollar.” In contrast, the Nigerian naira’s parallel market exchange rate currently stands at N505 per dollar according to Abokifx.

In his remarks, while speaking at the Finance Correspondents Association of Nigeria (FICAN) forum, Yusuf warned that such foreign exchange shortages could negatively impact the country’s banking system. Yusuf explained:

Foreign exchange illiquidity aggravates investment risk which could negatively impact asset quality in the banking system. Foreign currency-denominated loans account for between 30 per cent and 35 per cent of banks’ loan books. Foreign exchange volatility is associated with risks relating to asset quality and financial stability.

Conducive Business Environment

The report quotes Yusuf arguing the case for a conducive business climate which he insists will “create more avenues for investment” for financial institutions. In addition, more profitable asset classes will be needed for such profitable investments to take place, he said.

Additionally, Yusuf is also quoted stressing the “need to address the structural, policy, institutional and regulatory constraints in the business environment which would also result in a reduction in non-performing loans in the banking sector.”

What do you think Nigeria needs to do to end foreign exchange shortages? Tell us what you think in the comments section below.

Indian Bank Blocks Use of RBI’s Remittance System for Crypto While Government Delays Bill

Indian Bank Blocks Use of RBI's Remittance System for Crypto While Government Delays Bill

Major Indian bank ICICI has asked customers not to use the Reserve Bank of India (RBI)’s liberalised remittance scheme (LRS) for any crypto-related investments.

  • ICICI, a leading private sector bank in India, has updated its retail outward remittance application to include cryptocurrency.
  • With this update, the bank has asked its customers to declare under India’s Foreign Exchange Management Act 1999 (FEMA) that they will not use the Reserve Bank of India (RBI)’s liberalised remittance scheme (LRS) for any crypto-related investments.
  • The bank’s declaration states:

The above remittance is not for investment / purchase of bitcoin / cryptocurrencies / virtual currencies (such as ethereum, ripple, litecoin, dash, peercoin, dogecoin, primecoin, chinacoin, ven, bitcoin or any other virtual currency / cryptocurrency / bitcoin).

  • Customers must also declare that the remittance is not for any investments in a “company dealing in bitcoins / cryptocurrency / virtual currencies.”
  • Furthermore, customers must also declare that “The source of funds for the proposed remittance is not proceeds from redemption of investment in cryptocurrency / bitcoins / virtual currencies and also end use of.”

  • ICICI bank was among several major Indian banks that halted services to crypto customers after the RBI issued a notice regarding its April 2018 circular that banned banks from providing services to crypto businesses.
  • In May, the central bank issued a notice to banks stating that “the circular is no longer valid from the date of the supreme court judgment, and therefore cannot be cited or quoted from.” The Indian supreme court quashed the circular in March last year.
  • Meanwhile, the Indian crypto bill is not listed in the upcoming session of parliament, the Monsoon Session, despite the country’s finance minister stating recently that the bill was ready for cabinet consideration.

What do you think about ICICI bank’s crypto policy and the crypto bill being delayed? Let us know in the comments section below.