IMF Addresses Crypto ‘Dark Side’ As Volumes Flood In Nigeria - Sundiata Tech

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Friday, March 16, 2018

IMF Addresses Crypto ‘Dark Side’ As Volumes Flood In Nigeria



Volume of bitcoin transaction in Nigeria rose to N1.731 billion on the first week of March, 2018 according to data from LocalBitcoins published on the Coin.dance. This is in contrast to data going back to the first week of January where volume transactions dropped to N1.504 billion and continued the slide till the last week of January at N1.331 billion.

This is coming at a time when the International Monetary Fund (IMF) is asking investors in cryptocurrencies to trade cautiously. In a post on the IMF website titled ‘Address the Dark Side of the Crypto World’ Christine Lagarde, managing director of the fund, noted that growing fascination with cryptocurrencies has brought along grave costs such as money laundering, terrorism, and economic instability.

“The same reason crypto-assets – or what some people call cryptocurrencies – are so appealing is also what makes them dangerous,” she warned.

She stated that rapid growth of crypto-assets, the extreme volatility in their traded prices, and their ill-defined connections to the traditional financial world could easily create vulnerabilities.

“So we need to develop regulatory frameworks to meet an evolving challenge. Many organisations have already started,” Lagarde said.

She was perhaps referring to organisations like Google which announced on Wednesday, 14 March that it was placing a ban on cryptocurrencies and initial coin offering adverts on its platforms, and Facebook which made same move earlier this year.

A similar warning was issued in January, by the Central Bank of Nigeria (CBN) about the dangers of investing in cryptocurrencies. The CBN circular released to financial institutions directed them not to use, hold, trade and/or transact in any way in virtual currencies pending substantive regulation or decision by the apex bank.

As at the time of filing this report the price of bitcoin was at $9,021.49 on the Coinmarketcap Index.

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