The International Monetary Fund (IMF) on Friday stated that the cryptocurrency boom poses new challenges to financial stability.
The total market value of all the crypto assets surpassed $2 trillion as of September 2021—a 10-fold increase since early 2020. An entire ecosystem is also flourishing, replete with exchanges, wallets, miners, and stablecoin issuers.
According to a survey report by Luno, the leading global cryptocurrency company, Nigerians (81 percent) are the most willing to invest some of their salaries in cryptocurrencies over the next five years compared to 67 percent in Kenya and 63 percent in South Africa.
Ray Youssef, CEO / Co-Founder, Paxful, the largest Peer-to-Peer (P2P) crypto marketplace in Africa with a key presence across Nigeria, Kenya, and South African markets, said from February 2021 to March 2021, trade volume increased over 23 percent in Nigeria while as of April 2021, Bitcoin P2P trading has surged by 27 percent, since restrictions were introduced by CBN.
Read also: Eight in 10 Nigerians willing to invest in Cryptocurrency – Survey
In some emerging markets and developing economies, the IMF said cryptoisation can be driven by weak central bank credibility, vulnerable banking systems, inefficiencies in payment systems, and limited access to financial services.
The Washington bases Fund advised regulators to strengthen macroeconomic policies and consider the benefits of issuing central bank digital currencies and improving payment systems.
“Central bank digital currencies may help reduce cryptoisation pressures if they help satisfy a need for better payment technologies,” the IMF said in a new report on Friday.
About 60 percent of Central Banks across the globe, are under pressure to create digital currency due to the sudden rise in value and acceptability of Cryptocurrencies and the search by investors for alternative places to put their money.
The Central Bank of Nigeria (CBN) on Thursday night suspended the launch of its Digital Currency (CBDC) – the eNaira, earlier scheduled for October 1, 2021.
Globally, the Fund said policymakers should prioritize making cross-border payments faster, cheaper, more transparent, and inclusive through the G20 Cross Border Payments Roadmap.
African Export-Import Bank (Afreximbank) and African Continental Free Trade Area (AfCFTA) Secretariat on Tuesday announced the operational roll-out of the Pan-African Payment and Settlement System (PAPSS), a revolutionary Financial Market Infrastructure to enable instant, cross-border payments in local currencies between African markets.
By simplifying cross-border transactions and reducing the dependency on hard currencies for these transactions, PAPSS is set to boost intra-African trade significantly and underpin the implementation of the African Continental Free Trade Area (AfCFTA).
