Is Naira Giving Way To Cryptocurrency?

By UbongAbasi Ise

“Cryptocurrency would do to banks what e-mail do to post office” – Nsuwake Jimmy

Not just the Naira, other major fiat currencies such as the Pound Sterling, Dollar, Euros, Francs, Yuan, Yen,  and so on are predicted by some digital money experts to lose their grounds to the emerging digital means of exchange called cryptocurrency, and this would happen in the near future. However, Akwa Ibom State in recent times has witnessed increasing dots of Cryptocurrency exchange outlets especially in Uyo, and this rings the bell to announce that another sort of revolution in the financial sector is on the horizon. Speaking with The Sensor recently, Mr. Udeme Rufus, a Digital Asset/Blockchain consultant, said that the use of this digital currencies would soon become a new norm. According to him, it is believed by the experts that cryptocurrency might wipe out the banks, although this remains to be seen.

            But would Cryptocurrency seize the hegemony of financial control from the banks? Considering the words of Miss Nsuwake Jimmy, the Manager of Crypto-Edge Global, Uyo, “Cryptocurrency would do to banks what e-mail do to post office.” With historical experience, anything is possible given the dynamics of technology. Since the world history is replete with the narratives of technological innovations and evolution as well as related shifts in the paradigm of social and economic systems, it is not surprising that another viable medium of exchange and investment could be evolved to overcome the limitations of the subsisting ones. From Stone Age to the present Digital Age of the 21^st Century, the stories are all about one form of technology taking over from the older ones, or phase them out completely. Money, as a means of exchange, has gone through evolution from trade-by-barter system, to cowry, manila, fiat currencies and now the world is talking about digital money.

             

CRYPTOCURRENCY AND UNDERLYING CONCEPTS

Describing cryptocurrency as the 21^st century money, Mr. Udeme Rufus simply said that it is the money that could not be touched with hands as it is internet-based. In the words of Mr. Bernard Mbride, the Manager of Crypto-Edge Global in Uyo, “Cryptocurrency is an encrypted, decentralized and digital currency. Encrypted in the sense that it is a sort of a peer-to-peer currency; decentralized in that, it is not controlled by any particular government or institution. Its value is simply based on the structure of demand and supply. It is the money that is transferred between peers and confirmed in a public ledger through a process called mining.”

Crypto-world is powered by Blockchain technology. This technology enables peer-to-peer payments to be carried out using decentralized cryptocurrencies through a shared ledger that verifies, records, and settles transactions within minutes.

Experts say that there are well over 2,000 cryptocurrencies at present with different structures. Mbride said, “There are several structures in cryptocurrency, and we have many currencies too. We have a central databank for cryptocurrency, and we call it Coin Market Cap. This is where one can identify legitimate and illegitimate coin. Why there are coins categorized as legitimate and illegitimate is that there are coins that are lucrative and used as a legal tender. One can use them in making purchases and for the investment purposes. There are those we call the upcoming coins which are not yet in the Coin Market Cap and do not have an exchange value. With the value of a currency, one should be able to convert from one form to another. Even with few clicks on the system, one could convert Naira to Bitcoin and Bitcoin to Naira.”

Some of the major coins available are Bitcoin, Ethereum, Ripple, Litecoin, Dash, NEO, Monero, BitConnect, and so on.

CAN CRYPTOCURRENCY OVERTAKE FIAT MONEY?

Interacting with The Sensor correspondent, Mr. Power Aden, the managing director of Strategic Wealth Builders Institute in Uyo, said that cryptocurrency is not just money but a commodity. He maintained that when a commodity is accepted as money, then it has value. This is because the determinants of the commodity’s value are the forces of demand and supply. The financial specialist added that currencies we use as cash today are not commodity, hence they lack value. According to him, gold, for example, serves both as commodity and money and it is used as medium of exchange, and this conferred upon it the value that does not depreciate. Aden pointed out that a carat of gold to a dollar in 1998 was $252.00, but in 2017 one carat of gold goes for $1,303.00, and in this way, the gold value keeps on appreciating while dollar, being cash, keeps on depreciating in value. According to him, cash was made to be depreciating while commodity’s value is meant to appreciate owing to the forces of demand and supply. In the like manner, cryptocurrency as a commodity, has the appreciating value. For example, one bitcoin in 2008 was equivalent to 0.003 cent, but as it keeps on appreciating, one bitcoin as at this year, stands at $5,685.34.

Mr. Peter Aden held that Naira, just like other fiat currencies, is meant to create debt, and not profit adding that fiat money nowadays are printed without backing up the corresponding value. He noted that evolution of fiat currency begins with the goldsmiths who devised a means by way of printing receipts to represent the actual quantity or value of gold that were not yet issued out. And so the currency was created as a backup of gold. The trend continued until the American President, Richard Nixon, ordered the removal of dollar from gold standard in 1971.  This development ushered in an era where currencies would be printed by countries of the world without backing up a particular commodity of value. Adding to this debate, Mr. Udeme Rufus asserted that fiat currency would continue to lose value because politicians tend to connive with unscrupulous elements in the banking sector to over-produce the currencies.

However, Mr. Bernard Mbride, said that cryptocurrency came to check the problem other currencies were having which was that of devaluation. According to him, the same amount a cryptocurrency is bought in Nigeria is the same rate obtainable in the United States, and that same figure appears everywhere in the world.

Mr. Aden also told The Sensor that with cryptocurrency, there is no fear of inflation as found in the fiat money sector because the appreciation of cryptocurrency, especially bitcoin, has a level it would end. He said that the vision of the crypto-world is to exchange one bitcoin to 50 million US dollars.

COMMERCIAL BANK’S PERSPECTIVE

 In a brief chat with The Sensor correspondent, a branch manager with the Stanbic IBTC bank, Mr. Emana Edem, dismissed the submission made by the proponents of cryptocurrency that banks would soon bow to the online-based crytocurrency maintaining that such a development is impossible as there are a lot of unbankable people all over Nigeria and everywhere in the world. He said that plans are underway to expand banking sector to accommodate more people who are yet to subscribe to bank services.

 MEANS OF CONVERTING CRYPTOCURRENCY TO REAL CASH

According to Mr. Udeme Rufus, the digital asset conversion instrument known as dascoin is a technology devised for the users to spend cryptocurrency on about 60 million platforms globally using mastercards and visacards. The technology operates with the software called Daspay developed by Cartaworlwide. Rufus said that the technology would be activated in the second quarter of 2018.

            The Marketing Manager of Crypto-Edge Global, Mr. Bernard Mbride, disclosed that there is an Automated Teller Machine for Bitcoin cards that could dispense fiat money, and plans are underway to bring the technology to Uyo.

            According to him, owners of cryptocurrency could still convert them to cash at the cryptocurrency exchange outlets available in town.

THE FUTURE OF CRYPTOCURRENCY IN NIGERIA

According to the Manager of Crypto-Edge Global, Miss Nsuwake Jimmy, countries like Russia, China, Japan, USA, France, Thailand, North and South Korea, and several others, have embraced cryptocurrency as the legal tender. She asserted that about 1.3% of Nigerian population is involved in emerging cryptocurrency trend. She added that there is growing confidence in terms of security as the Central Bank of Nigeria, CBN, has come up with the list of commercial banks that would incorporate cryptocurrency into their system. These include First Bank, Guarantee Trust Bank, and Stanbic IBTC Bank. Miss Jimmy enthused that in five years time, cryptocurrency would be used the same way as fiat currency in Nigeria.

Mr. Udeme Rufus on his part, added that CBN is in the process of creating a regulation in the cryptocurrency sector, and Dascoin has made its presentation to the CBN.

He said that about 80% of the global banks are trying to develop their own Blockchain. In Akwa Ibom State, the awareness of  Cryptocurrency  market is remarkable, and would get to another level because currently, there are young, passionate people who are now at the forefront of financial technology.

Meanwhile the CBN, sequel to setting up of an industry committee to look into and articulate a road map for Blockchain and  Cryptocurrency regulation has reiterated that it will not hinder the use of digital currencies in Nigeria. 

The regulator in a recent brief with industry experts stated that an agreement has been reached to formally adopt its use in Nigeria. 

A call to the Fintech Association of Nigeria confirms this and it is expected that a regulatory framework for same will be made available soonest.

CONTACTS

More information on cryptocurrency market and operation could be obtained from the following contacts:

·         You can contact Udeme Rufus for Netleaders/Dascoin lincense, Bitcoin/Ethereum mining and other cryptocurrency  portfolios with opportunity to earn daily, weekly, monthly income and long term deal.  Office address is at 78 Oron Road, Uyo. You can reach him on +2348135777735. www.netleaders.com, www.dasfinthech.com, www.dasleaders.com

·         Mr. Bernard Mbride, Crypto-Edge Global, Ikot Ekpene Road by Ikpa Road Junction, Uyo. Phone number: 08039249572

·         Strategic Wealth Builders Institute, 15 Osong Uma Road, by Udo Udoma Avenue, Uyo.