‘CBN Already Thinking of Naira Digital Currency’-takeaways from Techpoint Digital Currency Summit
History was made yesterday as Techpoint’s Digital Currency Summit at Four Points By Sheraton became one of the largest gatherings of cryptocurrency experts on Nigerian soil.
The event, like many tech events in recent times, has a mixture of physical and virtual participation.
The summit, which is the maiden edition of the event, was an impactful outing that featured some upcoming and innovative African cryptocurrency companies and entrepreneurs solving problems with the latest blockchain technologies.
Themed “Building the money of the future“, Crypto CEOs, thought leaders and industry experts all shared insights about digital currencies, crypto security and crypto regulation in Nigeria.
Here’s a roundup of some of the major takeaways from the keynote speeches and plenary sessions from the event.
Getting into Digital currencies – Research
For first-timers, how to get started with digital currencies is a major question. In his introductory speech, the CEO of Daba, Chris Ani expressed that extensive research and understanding of Bitcoin and blockchain technology is the first step.
He explained that many want to jump into the investing part but it’s very risky if you don’t understand the currency.
He’s not alone, Oluwatosin Olaseinde, Founder of Money Africa, explained that for crypto investors to protect themselves they need to carry out extensive research and understand the asset and not follow the crowd when making an investment decision.
She advised that even if you want to invest in cryptocurrency, you should not exceed more than 10% of your portfolio size. This is because the currency is very volatile.
If your asset is in a place and you can’t sleep at night then there is a big problem.Oluwatosin Olaseinde, Founder of Money Africa
Buchi Okoro, CEO of Quidax, however, explained that the high volatility of Bitcoin is because it is still a small asset compared to real estate. He added that once Bitcoin grows big enough, the volatility will reduce and the currency will be more stable.
Benefits of digital currencies – Investment, Trading, Remittance
The benefits and potential of digital currencies which cryptocurrency is the foremost of is much and far-reaching. Currently, there are several ways by which people take advantage of digital currencies.
One major major way is remittance. Talking about the benefits of cryptocurrencies, Buchi mentioned the fact that cryptocurrency is a global currency that lets you transport money across the world easily.
Ben Eluan, Blueloop CEO added that his company has been able to facilitate cross-border payments and remittance using crypto on his platform. He’s not alone as Ruth Iselema, CEO of Bitmama also confirmed that her platform makes the transfer of money across Africa and from the US to Africa possible using crypto.
Asides from transfers, people in struggling economies also use digital currencies to store value. Quidax CEO during his speech revealed that many people use crypto to protect their money from devaluation.
He explained that digital currency gives you control of your money and helps protect your money from the prying eyes of the government.
Another obvious way you can benefit from digital currencies is trading and investment. Chris explained that as a novice, you can start by trading Bitcoin on centralized exchanges then move to other altcoins like Ethereum. He added that there are different markets -Bitcoin markets, stable coin markets etc that you can trade with all from your smartphone.
Crypto Problems, Security & Precautions
Despite the immense benefits of digital currencies, they also have flaws the most popular of which is their use in crime. Buchi pointed out that stories of sites like silk road, the Amazon for drugs where Bitcoin was used as payments has created an association of crime with Bitcoin.
Money Africa CEO talked extensively about scams and hacks, opining that due to crypto security problems, investors can lose their money as keys can be stolen, exchanges can get hacked etc.
She revealed that people can protect themselves using insurance as it is also available for cryptos. Oluwatosin also spoke about diversification and the fact that long term play is very important when it comes to investments. According to her, it is important to balance your investment by investing in more than one asset so that you have something to fall back on in case of a crash.
Digital money is the majority form of money compared to the physical paperOluwatosin Olaseinde, Founder of Money Africa
Buchi, however, expressed the fact that Bitcoin and cryptocurrency as a whole have been around for more than 13 years and haven’t been hacked.
He pointed out that there are people who have made it their job to sit down and try to hack it but they haven’t been successful. According to Buchi, this means that the lifespan of Bitcoin is very very long, considering the Lindy effect.
The Lindy Effect is a theorized phenomenon by which the future life expectancy of some non-perishable things like a technology or an idea is proportional to their current age so that every additional period of survival implies a longer remaining life expectancy.
Speaking on how to avoid crypto scam, Onomor Benjamin, CEO of Roqqu, explained that the first thing is to research, then ask those that already play in the space.
Adedeji Owonibi, Senior partner A&D Forensics agrees with Benjamin but pointed out that the legitimacy of exchange is still tied to regulation. He explained that people want to be protected so they want to know if the exchange is licensed to operate where they do.
where there are no crypto regulations, charlatans will take over and that is what is happening in Nigeria. When a scam happens, you don’t know where to start or track themAdedeji Owonibi, Senior partner A&D Forensics
It’s no longer news that the CBN ban has affected the use of crypto for remittances in the country. According to Blueloop CEO, since the ban, there is currently no direct way to change crypto into fiat.
He however added that platforms are coming up with innovative ways to make it happen even as many are now using peer to peer (P2P) transactions.
Speaking on the sustainability of peer to peer transactions, Ruth Iselema, CEO of Bitmama explained that P2P has been the most fundamental way people trade crypto but it has a lot of risks due to the fact that scammers can scam someone which is where the problem is.
She however called on the CBN to reverse its policy and regulate cryptocurrency instead. That way they can track its use for crime through exchanges.
She’s not alone as Ina Arome, Head of Fintech Practices at Aluko & Oyebode highlighted that regulation was important even as the CBN tries to fully understand cryptocurrencies.
Founder of Bitcoin Nigeria User Group, Chimezie Chuta who was part of the committee that drafted the SEC regulatory draft, on his part also agreed on regulation. He expressed that CBN needs to formulate risk-based standards that can help players in the industry.
He added that there is now an industry-wide consortium called BICCoN that has the ears of the CBN and is working towards getting the attention of the CBN and restoring the status quo.
Chimezie also revealed that the CBN has requested a position paper that outlines and deals with all their concerns.
From forex shortages, dollar spending limits, devaluation and inflation, the Nigerian financial industry is characterized by many problems. Crypto, being a global currency, provides an opportunity for Nigerians to leapfrog these issues and enjoy some stability in the financial system.
The Digital Currency Summit revealed how people can use and benefit from digital currencies. It also addresses most of the problems affecting the use and deployment in the country.
The event concluded with different experts expressing great prospects for the currency and the fact that digital currencies could revolutionize finance in Nigeria and Africa as a whole.
Bitmama CEO speaking about the future of remittance, forecasted that in the future traditional remittance company’s like Western Union and Transfer wise will either have a blockchain department or start buying out crypto remittance company.
Chris, on the other hand, expressed that the crypto market will grow despite the stifling regulation by the government because innovation has gone ahead of the government. According to him, people no longer need their permission to create currencies.
However, Chimezie forecasts that Nigeria will still have its own Naira Digital currency and that the CBN is already thinking about it.
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