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Nigerian banks impede e-Naira adoption over concerns it will impact banking revenue

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Nigerian banks impede e-Naira adoption over concerns it will impact banking revenue

Nigerian banks impede e-Naira adoption over concerns it will impact banking revenue Zeynep Geylan · 8 hours ago · 2 min read

Nigeria’s low-cost digital currency e-Naira is having gaining traction as banks are reluctant to promote it due to concerns that it will impact their revenue.

2 min read

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Updated: July 20, 2022 at 3:09 pm

Cover art/illustration via CryptoSlate

Nigerian banks are reluctant to promote Nigeria’s low-cost central bank digital currency, e-Naira, due to concerns of losing revenue.

E-Naira offers a commission-free alternative to traditional money transfers. However, only 700,000 users have created an e-Naira wallet since the currency launched in October 2021. This number is incredibly low, given that Nigeria has nearly 55 million bank accounts.

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Lenders are reluctant

Nigeria’s Central Bank Governor, Godwin Emefiele, commented on the low adoption and said:

“There is apathy [towards e-Naira] at the banks.”

Nigerian banks have invested heavily in digital banking services to create additional commission-based income streams. Overall, everything the e-Naira offers undermines these investments because it provides a low-cost alternative to money transfers, and deposits in e-Naira wallets don’t count as cash in lenders’ books.

Currently, e-Naira wallets are only available to bank customers. To increase adoption, the Nigerian Central Bank is collaborating with Africa’s largest mobile network operator MTN Group to give Nigerians that don’t have bank accounts access to e-Naira wallets.

Emefiele mentioned the new project and said it’s “almost concluding tests.”

Nigeria on crypto

Nigeria is one of the countries with the highest crypto adoption. In 2021, Nigeria was one of the countries that led the 880% global crypto growth in one year. At the time, 24.2% of all Nigerians invested in at least one digital asset, while Bitcoin was the most popular choice with over 60%.

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Gemini’s 2022 Global State of Crypto report showed that the national ownership rate increased to 26% in 2022. In addition, 63% of Nigerians think that crypto is the future of money. More than 44% of non-crypto owners also said they’re interested in buying crypto in the coming year.

While society is confident in how they feel about crypto, the Nigerian government seems in-between. The country decided to work on e-Naira in September 2021. At the time, the officials said they considered making e-Naira the legal tender because “85% of Central banks were considering adopting digital currencies in their countries.”

One month later, the government announced the indefinite suspension of the e-Naira project because “other key activities lined up to commemorate the country’s 61st Independence Anniversary.”

Regardless, the e-Naira was launched within the same month, in October.

About two weeks after the launch of e-Naira, Nigeria’s Central Bank ordered the country’s financial institutions to close all crypto-related bank accounts.

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Currently, the ban on crypto-related bank accounts continues while crypto trading is still legal in the country.

Banking

Pictet Group tells private banks to stay away from crypto

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Pictet Group tells private banks to stay away from crypto

Pictet Group tells private banks to stay away from crypto Monica Noronha · 2 hours ago · 2 min read

Pictet’s Asia arm CEO Tee Fong Seng said that though cryptocurrencies have potential, now is not the right time for private banks to invest.

2 min read

Updated: August 4, 2022 at 8:23 pm

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Cover art/illustration via CryptoSlate

Amid the current market meltdown, Swiss wealth management firm Pictet Group is cautioning private banks against investing in crypto, Bloomberg News reported Aug 4.

Speaking on a panel at the Bloomberg Asia Wealth Summit in Singapore, CEO of Pictet Group’s Asia wealth management arm Tee Fong Seng said:

“Crypto will be an asset class that we cannot ignore, but today I don’t think there is a place for private bankers and for private bank portfolios.”

The crypto market saw one of the most devastating turmoils over the past few months, triggered by the collapse of the TerraUSD (USDTC). Terra’s downfall created a serious liquidity crisis among several crypto lenders that led to the bankruptcy of crypto hedge fund Three Arrows Capital, Celsius Network and Voyager Digital.

Other lenders battling liquidity issues are working on restructuring plans while some, like Vauld and Zipmex, have sought bankruptcy protection to figure out a solution. Additionally, the past few weeks have seen a slew of hacking exploits with hundreds of millions lost.

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While private banks shunned crypto a few years ago, with the market skyrocketing since 2020, some banks have warmed up to it. In May, Swiss bank Julius Baer Group Ltd announced that it will offer crypto services to wealthy clients. Last year, Citibank said that it would develop crypto-related services due to growing client interest.

Tee said:

“If you look at the volatility for the last two years, you can make a lot of money, you can lose a lot of money.

The question is, when do we bring the clients into the picture?”

Not everyone is scared of crypto

According to Nanda Ivens, chief marketing officer at Indonesian digital trading platform Tokocrypto, venture capital funds and institutions are displaying more interest in the crypto space, despite the recent turmoil, Bloomberg reported. For instance, Indonesia-based crypto fund Cydonia Capital raised $100 million

As an example, he cited Indonesian crypto fund Cydonia Capital recently raised $100 million, Ivens said.

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“There is a lot of interest for Web3 projects, especially when there are positive, good deal flows coming through those Web3 venture capital funds.”

But still, most remain wary of the crypto market and its prospects, despite the recent rallies. Rich Teo, co-founder and CEO of Paxos Asia said he is “bearish” on crypto and expects more “deleveraging.”

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Santander Brazil to launch cryptocurrency trading platform

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Santander Brazil to launch cryptocurrency trading platform

Santander Brazil is looking to launch a crypto trading desk for its clients within the next couple of months, CEO Mario Leao told local media.

Banco Santander is set to launch a host of crypto-related services within Brazil soon, with more details of the development likely to go public when the company’s next earnings go live in October. On the matter, Leao pointed out:

“We recognize that it is a market that is here to stay, and it is not necessarily a reaction to competitors positioning themselves, it is simply a vision that our client has demand for this type of asset, so we have to find the most correct and most educational way to do it,”

Earlier in March, the company announced the launch of token-backed loans for Argentinian farmers.  The deal was facilitated in conjunction with the S.American agri-commodities tokenization platform Agrotoken.

The bank also launched an initiative designed to help foster the growth of startups associated with the global blockchain ecosystem called “Santander X Global Challenge  — Blockchain and Beyond.”

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Brazil becoming hotbed for crypto finance

In recent months, a growing number of non-crypto financial companies have revealed their plans to launch crypto ventures in Brazil.

Fintech firm PicPay recently announced that it will be launching a crypto exchange in the country alongside a stablecoin pegged to the Brazilian real by the end of 2022.

Late last year, Mercado Libre, Latin America’s largest e-commerce firm by total valuation, afforded its Brazilian users the option to start buying, selling, and holding digital assets using its platform.

Earlier this week, Brazil’s largest digital bank, Nubank, announced that it had accrued a whopping one million users for its crypto trading platform within just 30 days of its launch.

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Crypto is likely to integrate with the future financial system

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Crypto is likely to integrate with the future financial system

Crypto is likely to integrate with the future financial system Zeynep Geylan · 1 min ago · 2 min read

Hong Kong Monetary Authority recently said that crypto will probably play a central role in the financial systems in the future.

2 min read

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Updated: July 20, 2022 at 4:16 am

Cover art/illustration via CryptoSlate

Hong Kong Monetary Authority’s (HKMA) CEO Eddie Yue recently said that cryptocurrencies are likely to play a central role in the financial systems in the future, despite the recent problems in the sector.

Yue spoke during the G20 meetings on July 17 and said that he didn’t think crypto and DeFi would disappear, even after the LUNA incident. While admitting they could be held back, Yue still promoted the benefits of the technology. He said:

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“The technology and the bushiness innovation behind these developments are likely to be important for our future financial system,”

Yue said successful crypto protocols could be altered to adapt to the current financial market. He also stressed the importance of a comprehensive regulation that can support the healthy growth of this implementation.

Bitcoin as a part of every portfolio

Blackrock’s former executive Edward Dowd, unaware of Yue’s comments, also recently said Bitcoin would become a part of everyone’s portfolio.

Dowd also argued that the bear market conditions are not the end of crypto. However, he also differentiated Bitcoin from other cryptocurrencies and said it would likely beat gold in the future.

He said:

“Bitcoin is here to stay. It is going to be a part of everyone’s portfolio. At least with Bitcoin, you can exchange it digitally, and gold is a much tougher sale for me. I’m not against gold, and having some gold is not a bad idea,”

He likened Bitcoin to Amazon during the early days of the internet. According to Dowd, 90% of cryptocurrencies will collapse, just like 90% of online companies did during the early years of the internet. Bitcoin is like the remaining 10% of those years, which became Amazon.

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Like-minded officials

Yue and Dowd speak the same lines as U.S. Senators Cynthia Lummis and Kristen Gillibrand. The duo recently presented a draft bill to integrate cryptocurrencies into the financial system. The bill appoints the Commodity Futures Trading Commission (CFTC) as the crypto market regulator and aims to incorporate crypto into the U.S. financial system fully.

Another governmental office that agrees with the rest is the Bank of England (BoE). The bank has been speaking fondly of the crypto sector for years while being cautious about the volatility. Recently,  BoE’s Deputy Governor for Financial Stability Jon Cunliffe also likened the crypto sector to the early days of the internet. He said he was confident in crypto’s future and promoted its incorporation into the financial system. However, like Yue, Cunliffe also called for a regulatory framework.

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