El Salvador makes history tomorrow by becoming the first country in the world to make Bitcoin official legal tender – and other nations will soon follow suit, predicts the CEO of one of the world’s largest financial advisory, asset management and fintech organizations.
The prediction from Nigel Green, chief executive and founder of deVere Group, a game-changing financial services giant, comes ahead of Tuesday’s adoption of the cryptocurrency as national currency alongside the U.S. dollar in the small Central American country.
Currently, outside of the U.S. and its territories, there are seven other sovereign nations that use the U.S. dollar.
Mr. Green comments: “El Salvador is making history with a bold jump into the future of money – which is, inevitably, digital – by officially recognising Bitcoin as legal tender together with the U.S. dollar.
“Other countries, in particular other Central and South American nations, will be watching with great interest to see if the experiment works to shore up El Salvador’s shaky economy.
“There’s no doubt that there are major risks attached to the decision made by the young maverick president, Nayib Bukele.
“These include that there is a possibility that El Salvador could run out of dollars and that institutions, such as the IMF, might not look favourably on a nation that has adopted Bitcoin.”
The risks prompted some El Salvadorans last week to take to the streets to protest against the adoption of Bitcoin as an official currency.
He continues: “However, I’m giving El Salvador’s Bitcoin move a cautiously optimistic welcome for five key reasons
“First, El Salvador chose to be reliant upon a major ‘first-world’ currency, the U.S. dollar, to complete transactions. But this reliance on another country’s currency also comes with its own set of, often very costly, problems.
“The El Salvadoran government cannot print its own money and the economy cannot benefit from the U.S. Federal Reserve’s money-printing agenda. Therefore, El Salvador must either borrow or earn the dollars it needs.
“A stronger U.S. dollar can have a crippling impact on emerging-market economies, such as that of El Salvador.
“By adopting a cryptocurrency as legal tender these countries then immediately have a currency that isn’t influenced by market conditions within their own economy, nor directly from just one other country’s economy.
“Bitcoin operates on a global scale and is, as such, largely impacted by wider, global economic changes.
“Second, central banks around the world have been devaluing their currencies, while Bitcoin’s supply is not only limited but also new coins are mined at a decreasing rate too. El Salvadorans could, therefore, find their new adopted currency gives them more purchasing power when they buy from overseas.”
He goes on to say: “Third, El Salvador’s adoption of Bitcoin could cut the cost of remittances, a major source of income for millions of people. The remittances would be made faster and easier too, compared to money transfer services or bank wires, so remittances are likely to further increase.
“Fourth, by diversifying the nation’s dollar reserves into the cryptocurrency, there could be additional opportunities to earn yield, meaning the size of the reserves would grow.
“And fifth, El Salvador could benefit from significant foreign investment and capital inflows as digital asset organisations are likely to relocate to the Bitcoin-friendly nation.”
Clearly, if the adoption proves to be a success it will be a massive step for Bitcoin’s mass adoption as other countries will follow El Salvador’s lead.
“Due to their similar reliance on remittances, amongst other factors, other nations, including Panama, Guatemala and Honduras, could also adopt Bitcoin should the process in El Salvador run smoothly and there’s greater economic growth, stability, and levels of financial inclusion as a result.”
The deVere CEO concludes: “We’re giving a measured welcome to the move that could make a hugely positive impact on this Central American nation and its population.
“This is truly a landmark moment in the evolution of digital currency.”
Fox Wallet Bridges the Gap Between DeFi and CeFi with the Launch of an Africa-First, New and Insured Multi-Crypto Wallet
Fox Wallet has launched an innovative new entrant to the crypto wallet market, allowing both veterans as well as newcomers in the crypto space to safely participate in the world of DeFi, while bringing CeFi under one roof. FoxWallet is simple to use, safe and most importantly, secures its members through crypto-insurance provided free of charge for all cryptocurrencies stored on the platform.
Fox Wallet has advanced security features which boasts MFA (Multi-Factor Authentication) to initiate outgoing transactions as well as multiple blockchain-based checkpoints to enhance security. As a custodian, the company splits private keys into 3 parts, hosting them in separate safe locations with the 3rd key-shard of the private keys being held offline.
Fox Wallet allows users to create multiple cryptocurrency vaults where cryptocurrencies can be safely stored. Users can create up to 5 secure vaults and store one of each supported type of cryptocurrency wallet in each vault. Getting on-ramped is easy for international users with a convenient credit card integration as well as a compliant integration for South African users through an instant EFT service.
“There can be no doubt that crypto currencies are the present and the future. I believe this is an opportune time for Africa to catch up to the rest of the world, by actively participating in crypto currencies and blockchain technology. Our vision is to make it easy for everyone to participate by making sure we present a way to interact with the world of crypto in a safe manner and remove or reduce the technical debt of cyber-security and getting into defi platforms.” said Lonwabo Fololo, Co-Founder and CEO of Fox Wallet
Fox Wallet not only offers a range of transactional capabilities, but also the ability for users to manage their cryptocurrency portfolios and participate with popular DeFi platforms across multiple protocols as the technology stack aims to support up to 17 blockchains and up to 500 cryptocurrencies. Currently, users can securely send, receive and buy BTC, ETH, LTC, XRP and USDC with more tokens and coins being added based on user demand with added support for asset-backed security tokens on the roadmap as well.
In the future, users can also look forward to a VISA Card integration to spend their dollar-pegged cryptocurrency as a convenient off-ramp for their cryptocurrency at the 60 million VISA merchants operating globally.
“Creating a wallet is usually the first experience people have in the blockchain world, we want to make sure that the experience is not only safe and secure but that it lasts long enough to leave a legacy” said Neo Check, Co-Founder and CMO of Fox Wallet.
For more information about Fox Wallet visit https://FoxWallet.app
Official eNaira Website Goes Live
The Central Bank of Nigeria’s (CBN) eNaira website has gone live a week before the planned launch of the digital currency.
The website promises easier financial transactions for users of eNaira, offers opportunity for peer-to-peer payments which allows users to send money to one another through a linked bank account or card; allows customers to move money from their bank account to their eNaira wallet with ease; can monitor their eNaira wallet, check balances and view transaction history; and make in-store payment using their eNaira wallet by scanning QR codes.
In addition, customers are allowed to scan the QR Code on the website to get started.
CBN Governor, Mr. Godwin Emefiele, while speaking to a gathering of foreign investors in New York, recently, had told his audience that because of activities surrounding the country’s Independence celebration on October 1, the earlier planned launch of the eNaira on same date would likely be rescheduled to October 4, 2021.
“The central bank would not want the event to take the shine away from the Independence celebration,” he said.
“We are going to be the first country in Africa to launch a digital currency. It is a novel idea because we think it will facilitate trade, Nigeria being the biggest economy in Africa, this will set the tone to tell Africa that we are ready to lead and we would indeed lead in trade and we would make sure that happens.
“Between all central bankers in ECOWAS, we are already working on certain collaboration to make trade, payment and banking system integrate in such a way to set example on the African Continental Free Trade Area (AfCFTA),” he added.
In line with global trend, the CBN recently took a major step towards the launch of its digital currency with its formal announcement of its engagement of global fintech company, Bitt Inc. as its technical partner for the project. To choose the technical partner, the CBN went through a rigorous vendor selection process in line with the Public Procurement Act, conducted by seven departmental directors and a Deputy Governor whereby several companies were evaluated. The evaluation was based on the following criteria: technology ownership and control; implementation timeline; efficiency, ease of adoption; support for anti-money laundering and combating the financing of terrorism (AML/CFT); platform security; interoperability; implementation experience.
Emefiele expressed optimism that the eNaira, would bring about increased cross-border trade, accelerate financial inclusion and lead to cheaper and faster remittance inflow. He said the digital money would lead to easier targeted social interventions, as well as improvement in monetary policy effectiveness, payment systems efficiency, and tax collection.
According to him, after its unveiling, Nigerians should be able to download the eNaira app from either Google plays store or Apple app store, on board themselves and fund their eNaira wallet using their bank account or with cash at a registered agent location.
“If you are a bank customer and you have say N10 million in your bank account, for your comfort of spending and making purchase, you can tell the bank to load N2 million out of your N10 million into your wallet.
“So, your bank balance in physical cash drops to N8 million, while your e-wallet carries N2 million. With that you can make purchases both within and across the country.
“There are so many variance of the eNaira. But this is where we would start because we are not going to pretend that there are not risks in opening your system up. We would look at the various products, determine the risk, determine the best way to mitigate the risk before we now open it up more and more,” Emefiele added.
Also shedding more light on Bitts, he said, “we chose them as a partner. In some other climes where they are, they have their software and they earn their money. But we chose that they would establish their company in Nigeria. “The CBN will own substantially stake in that company. It is a company that will be established in Nigeria and majority holding will be the CBN,” he added.
On his part, the CBN’s Director, Corporate Communications Department, Mr. Osita Nwanisobi, explained that the eNaira project had been a long and thorough process for the apex bank following its resolve in 2017, to digitise the local currency after extensive research and exploration.
Meanwhile, China’s central bank last weekend announced that all transactions of crypto-currencies are illegal, effectively banning digital tokens such as Bitcoin.
“Virtual currency-related business activities are illegal financial activities,” the BBC quoted People’s Bank of China to have said, warning it “seriously endangers the safety of people’s assets”. China is one of the world’s largest crypto-currency markets. Fluctuations there often impact the global price of crypto-currencies.
The price of Bitcoin fell by more than $2,000 (£1,460) in the wake of the Chinese announcement.
It was the latest in China’s national crackdown on what it sees as a volatile, speculative investment at best – and a way to launder money at worst. Trading crypto-currency had officially been banned in China since 2019, but had continued online through foreign exchanges. However, there has been a significant crackdown this year.
In May, Chinese state intuitions warned buyers they would have no protection for continuing to trade Bitcoin and other currencies online, as government officials vowed to increase pressure on the industry.
In June, it told banks and payment platforms to stop facilitating transactions and issued bans on “mining” the currencies – the trade of using powerful computers to make new coins.
Cryptocurrency Exchanges Rush to Cut Ties With Chinese Users After Fresh Crackdown
Cryptocurrency exchanges and providers of crypto services are scrambling to sever business ties with mainland Chinese clients, after Beijing last Friday issued a blanket ban on all crypto trading and mining.
In a culmination of years of efforts to rein in the sector, 10 powerful Chinese government bodies including the central bank, said overseas exchanges were barred from providing services to mainland investors via the internet – a previously grey area – and vowed to jointly root out “illegal” cryptocurrency activities.
Huobi Global and Binance, two of the world’s largest exchanges and popular with Chinese users, have stopped new registrations of accounts by mainland customers. Huobi also said it would clean up existing ones by the end of the year.
“On the very day we saw the notice, we started to take corrective measures,” Du Jun, Huobi Group co-founder said in a statement to Reuters.
Du did not give an estimate how many of its users would be affected, saying only that Huobi, once the world’s biggest crypto exchange, had embarked on a global expansion strategy many years ago and seen steady growth in Southeast Asia and Europe.
Shares in crypto-related firms tumbled on Monday with crypto asset manager and trading firm Huobi Tech plunging 23% and OKG Technology Holdings Ltd, a fintech company majority owned by Xu Mingxing, the founder of cryptoexchange OKcoin, losing 12%.
TokenPocket, a popular service provider of crypto wallets, also said in a notice to clients that it would terminate services to mainland Chinese clients that risk violating Chinese policies and would “actively embrace” regulation. It added it welcomes cooperation from China in blockchain technologies.
Many Chinese crypto exchanges shut down or moved offshore in 2017, after China, once the world’s biggest bitcoin trading and mining centre, banned such platforms from converting legal tender into cryptocurrencies and vice versa. Then in May this year, China’s State Council vowed to ban bitcoin trading and mining.
Amid the crackdown, other types of Chinese crypto companies have been moving out of China over the past few months, said Flex Yang, founder and CEO of Babel Finance, adding that the impact from the latest policy would be “limited”.
The Chinese crypto financial services provider this month opened new business headquarters in Singapore.
Cobo, a crypto asset management and custodian platform, also recently moved its headquarters from Beijing to Singapore.
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