Recently, outlets reported on comments from Twitter CEO Jack Dorsey made at a conference, as well as on an earnings call, where the executive continued to prosecute the case for emerging blockchain-based technologies, including cryptocurrencies. He noted that cryptocurrencies are part of a technology trend which is beginning to mature and mainstream simultaneously, including artificial intelligence and decentralization.
“It is important to note that Jack Dorsey isn’t just a social media kingpin. He also was the founder of Square. He understands the payments stratosphere, and if he’s looking at cryptocurrencies and other blockchain-based payments to remain a considerable player in the way the world transacts its business, it’s definitely worth noting,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.
Dorsey wrapped up the earnings call saying, “With decentralization, we increased the size of the corpus of conversation we have access to and improved conversational help by giving more people, more power to individuals. And with the global currency, we can ensure people and companies can freely trade goods and services anywhere on the planet.”
“Dorsey is making the same argument that I’ve been making for several years. Blockchain is bigger than blockchain. Blockchain itself is a gamechanger. But, adopting the technology is meaningful, even beyond the immediate implications in the payments space. Dorsey is talking about how shareholders will benefit from the company participating in the space and investing ‘aggressively’ in it. But, it isn’t just an opportunity for shareholders and individual companies. There could be implications for entire economies,” noted Gardner.
“To see that, I really think you need to look at just how Estonia has transformed over the past couple decades. Today, it has carved itself a niche as a startup destination. That was done over the course of time, with leadership which took methodical steps to create a culture of innovation. That same model can be replicated today, as new technologies and innovators are looking for jurisdictions which are friendly,” opined Gardner.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.
“You’re going to see some startups flock to tech hubs like Silicon Valley or Tel Aviv. But, a lot of innovators that feed into the blockchain pipeline will look for a home that provides regulatory guidance which is friendly to innovation. By now, we’ve found out that innovation moves much faster than bureaucracy. As countries begin to roll out central bank digital currencies, leadership in that arena could be just what a developing economy needs to stand out from the pack. I think we’ve seen countries like The Bahamas, El Salvador, and Ghana all work to begin to build a culture that is seen as friendly by the fintech community. There’s no reason that countries like Kenya or Morocco, or even others that might find themselves well positioned in Eastern Europe or Southeast Asia, to begin to build a regional presence, as well. Right now, the industry is still evolving. Welcoming blockchain-based technologies is the first step to creating a culture that values technology as a way to create jobs and strengthen an economy,” said Gardner.
Nigeria Imposes Record $10 Billion Fine on Binance Over Forex Impact
The Nigerian government has levied a historic $10 billion fine against the cryptocurrency trading platform, Binance, citing its alleged role in the nation’s forex crisis.
The fine, which stands as the largest ever imposed by Nigeria on a single entity, comes amidst mounting concerns over the stability of the country’s currency and economy.
According to Bayo Onanuga, the special adviser on information and strategy to President Bola Tinubu, Binance stands accused of engaging in illegal transactions that have significantly impacted Nigeria’s foreign exchange market.
Onanuga asserted that Binance, despite lacking a physical presence or registration in Nigeria, facilitated illicit activities that led to substantial profits for the platform while causing immense losses for the nation.
The crux of the government’s allegations revolves around Binance’s alleged manipulation of exchange rates between the US dollar and the Nigerian naira.
Onanuga claimed that users on the platform were able to arbitrarily set exchange rates, a practice that contravenes Nigerian law and undermines the authority of the Central Bank of Nigeria (CBN) in regulating currency exchange.
The repercussions of Binance’s actions, as outlined by Onanuga, have been dire. The unregulated fixing of exchange rates purportedly contributed to a staggering 70% devaluation of the naira in recent months, exacerbating Nigeria’s already precarious economic situation.
In response to mounting pressure, Binance has ceased naira-related transactions on its platform and pledged cooperation with Nigerian authorities.
However, the government remains steadfast in its determination to hold the platform accountable for its alleged transgressions.
The imposition of the $10 billion fine underscores the severity of the situation and sends a clear message that Nigeria will not tolerate actions that jeopardize its economic stability.
The government’s move reflects its commitment to safeguarding the integrity of the nation’s financial systems and protecting the interests of its citizens.
As the controversy unfolds, questions linger regarding the broader implications for cryptocurrency regulation in Nigeria and the global fintech landscape.
With Binance facing unprecedented scrutiny and the forex crisis deepening, stakeholders await further developments that could reshape the trajectory of Nigeria’s economic future.
Binance Disables Naira Feature to Halt Possible Capital Outflow
Binance, the world’s leading cryptocurrency exchange platform, on Wednesday disabled the Naira pair on its Peer-to-Peer (P2P) platform shortly after Financial Times (FT) reported the arrest of two of the company’s executives.
The two executives reportedly flew into the country following the Federal Government’s decision to ban cryptocurrency exchanges to rein in speculation and curb currency manipulations.
However, the two were arrested by the authorities at the airport and their passports were confiscated pending investigation into Binance activities in Nigeria.
Binance which had sustained operations on its mobile application despite the ban imposed by the government on the organisation a week earlier and even released a statement to that effect suddenly disabled its Naira pair on Wednesday after FT broke the news of the arrest.
It should be recalled that Binance introduced the P2P service to beat the impact of sanctions on its operations after the Central Bank of Nigeria (CBN) restricted all financial institutions from facilitating cryptocurrency transactions in 2021.
This means that Binance disabled its Naira pair to curb capital outflow in the aftermath of the report and it is not in compliance with the Federal Government’s position as people are insinuating.
During the Monetary Policy Committee (MPC) press conference, Olayemi Cardoso, the Governor, CBN had heaped most of the woes of Nigeria’s currency on operations of Binance and other similar platforms.
According to him, a total of $26 billion was moved through Binance Nigeria in the last one year from both unknown sources and users.
He “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities [crypto platforms] and suspicious flows at best. In the case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify”.
Therefore, the news of the arrest would have triggered an exodus outflow of capital to other cryptocurrency exchange platforms like Kucoin and dragged on Binance’s activity level at a time when activity was just picking up ahead of Bitcoin Halving and the subsequent bullish run.
Nigeria is by far the largest cryptocurrency market in Sub-Saharan Africa and between July 2022 and June 2023 received $60 billion in crypto value, according to Chainalysis.
“Nigeria is one of only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the time period we studied. Its growth rate of 9.0% places it third among those six.”
Nigeria Detains Binance Executives in Crackdown on Cryptocurrency Speculation
Nigeria has detained two senior executives of Binance, one of the world’s largest cryptocurrency exchanges, over currency exchange manipulation on the company’s platform.
The crackdown comes amidst escalating concerns over the rampant devaluation of the naira, which has propelled inflation to a nearly three-decade high of 29.9%.
The detained executives flew to Nigeria in response to the government’s recent ban on several cryptocurrency trading platforms, only to find themselves detained by the office of the national security adviser, who also confiscated their passports.
While Binance has remained tight-lipped about the incident, Nigerian authorities have intensified their scrutiny of cryptocurrency exchanges as they seek to stem illicit financial flows and establish control over the nation’s monetary policy.
Nigeria’s central bank governor, Olayemi Cardoso has raised concerns over the flow of funds through crypto exchanges, citing $26 billion passing through Binance Nigeria in the past year alone from unidentifiable sources and users.
The government’s aggressive stance has prompted demands for detailed user lists from Binance since its inception, indicating a broader investigation into cryptocurrency activities within the country.
This crackdown marks a significant setback for Binance, which has been attempting to overhaul its internal operations following a $4.3 billion penalty imposed by US authorities for money laundering and sanctions violations.
The detention of its executives underscores the challenges cryptocurrency exchanges face in navigating regulatory landscapes worldwide, particularly in emerging markets like Nigeria where authorities are grappling with economic instability and currency devaluation.
As Nigeria intensifies its efforts to attract foreign investment and revitalize its struggling economy, the clash between regulatory oversight and the decentralized nature of cryptocurrencies underscores the complexities and tensions inherent in the global financial system.
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