- Bitcoin: NDIC, CBN Set Study Committee
Alhaji Umaru Ibrahim, the Managing Director, Nigeria Deposit Insurance Commission (NDIC), on Friday said the commission and CBN had set up a committee to look into the trending “digital currency, ‘bitcoin’.
Ibrahim said this at the ongoing 2016 Workshop for Financial Correspondents in Kaduna.
The theme of the workshop is ” Economic Recession and the Nigerians Banking Sector: Opportunities,Challenges and the way Forward”.
“On our part, we have constituted a committee together with the central bank to have an in debt study of this phenomenal bitcoin.
“We will look at it’s advantages and disadvantages, what it means for the payment system and what it means for safety and security of customers.
“We will also look at what it means for money laundering, anti curruption, crime and measurement of money /near money instrument for the economy.
“But we need a lot of education to do this and I’m calling on you (media) to educate yourselves about all of this so you can educate the public,” he said.
Ibrahim said ‘bitcoin’ included what is being called block chain technology based products in the market.
He said that a lot of Nigerians had already started patronising bitcoin, stressing that ‘it had started to creep in and nobody could stop it.
He said that in Europe and the United States, it had gained currency and some of the leading banks in Europe had also adopted their own versions of bitcoins.
“Some of the central banks have also adopted it and are seriously doing everything possible to bring in the emergence of this invisible products.
“The owners do not need any central bank; they do not need any physical bank.
“If you are a subscriber, you only know yourselves and they give you a bit of the bitcoin and in some countries you can convert it to cash.
“You can make payments with it because it has been recognised and one of the famous ex-chief executive of Barclays PLC, Antony Jenkins, have joined the groups board of directors,”Ibrahim said.
He explained that the financial service industry is not spared in all of this.
On the issue of “MMM”, he said it had been pronounced that it was not recognised and was illegal.
“It is a very serious matter and all hands must be on deck to educate the public against things like this.
On the current problems regarding the emergence of wonder banks, Ibrahim said NDIC would not relent in calling on Nigerians, educating and sensitising Nigerians on the dangers of patronising wonder banks.
He urged the media to help and continue to educate the public not to in anyway patronise institutions that were not licenced by the Central Bank or insured by the NDIC.
On financial inclusion, he said although the success recorded was not much but there had been improvement in the area of financial inclusion in the country.
“The successes recorded is not much, but it is a good start given the prevailing number if Nigerians excluded financially,
“I think if you check the statistics that has been rolled out you will appreciate that we have recorded tremendous successes in the last three years.
“This is since the introduction of cashless policy and mobile banking to the extent that more Nigerians are getting involved.
“But we have a very long way to go and it is your responsibility, as journalists, to continue to help educate Nigerians on the advantages of not keeping their money under their pillows and matrasses or in some cases in soak aways and ceilings.
“We know that people fear electronic fraud, but I can assure you that CBN and the banking community are doing everything possible to block all loop holes associated with mobile banking.
“And the advantages far out ways the disadvantages,” he said.
Gold Gained Ahead of Joe Biden Inauguration 2021
Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.
The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.
He said, “The key factor appears to be the (U.S.) currency.”
As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.
Also, the effectiveness of the vaccines can not be ascertained until wider rollout.
Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.
Crude Oil Holds Steady Above $55 Per Barrel on Tuesday
Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.
Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.
While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.
On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”
“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.
Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.
Crude Oil Pulled Back Despite Joe Biden Stimulus
Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.
Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.
On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.
OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”
“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”
Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.
“The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.
Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.
But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.
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