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Stablecoins to Revolutionise Africa’s Economic Landscape

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In an era where financial empowerment is paramount, Africa is witnessing a remarkable surge in the adoption of stablecoins, poised to reshape the continent’s economic landscape.

Cryptocurrency, once a buzzword, has now evolved into an indispensable force for financial innovation and inclusion.

Among these digital currencies, stablecoins have emerged as a beacon of stability and accessibility, offering a number of benefits to individuals and businesses alike.

Yellow Card – the fastest-growing cryptocurrency company in Africa, with a presence in over 17 countries – has seen the positive impact that stablecoins are having in digital transformation and financial inclusion.

Adoption and Scalability:

According to a report by Emurgo Africa, between 2021 and 2022, Africa experienced a staggering 1200% surge in cryptocurrency adoption. However, to better understand the significant growth, we need to unpack the contributing factors around adoption and use cases.

“If we compare crypto adoption in Africa to the West, we notice distinct differences in customer needs and use patterns. In the West, cryptocurrencies are primarily used for investment and trading, whereas in Africa, they serve as a hedge against inflation and a means for cross-border payments. Many Africans seek stability, which stablecoins undoubtedly provide,” said John Colson, CMO of Yellow Card.

Stablecoins are pegged to stable currencies and powered by blockchain technology. Various blockchains look for ways to make accessing them cheaper compared to traditional means of sending money. This mission drives the innovation behind the likes of Solana, whose network allows stablecoins to be accessed cheaper and easier for people – with low network fees and faster transaction times.

As part of its ongoing efforts to enhance accessibility and convenience in the world of cryptocurrencies, Yellow Card has added support for USDC on the Solana blockchain.

Peter Mureu, Director of Marketing at Yellow Card, expressed enthusiasm, stating, “We are excited to leverage the Solana network to bring the benefits of stablecoins and cryptocurrencies to African users. Solana’s network has played a pivotal role in driving stablecoin adoption across Africa with high transaction speeds while maintaining decentralisation through innovative approaches.”

Looking to the Future:

One of the main challenges in the industry is centred around regulatory frameworks, specific to each country, that seek to strike a balance between fostering innovation and ensuring consumer protection and financial stability. Continued conversations with regulatory bodies, government and participating in sandboxes as well as knowledge sharing are pivotal factors in creating a successful and sustainable industry.

Another notable challenge lies in the scalability and cost-effectiveness of blockchain networks, especially when it comes to handling the growing demand for stablecoins in Africa. Solana’s blockchain technology is instrumental in addressing this challenge ensuring that stablecoins can efficiently serve the needs of African customers.

Education remains an important factor in the ecosystem and Yellow Card is spearheading many initiatives to foster inclusivity to break down the barriers to understanding and access. Some of their initiatives include the free Yellow Card Academy, Brand Ambassador program, webinars and many on-the-ground events.

As Africa continues to embrace cryptocurrencies and stablecoins, innovative solutions are set to play a pivotal role in reshaping the financial landscape, fostering economic stability, and enhancing financial inclusion across the continent. Yellow Card stands poised to play a pivotal role in shaping the next chapter of Africa’s financial evolution.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigeria Imposes Record $10 Billion Fine on Binance Over Forex Impact

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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.

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Binance Disables Naira Feature to Halt Possible Capital Outflow

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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.”

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Nigeria Detains Binance Executives in Crackdown on Cryptocurrency Speculation

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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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