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Zimbabwe’s Mobile Money Ban And The Impact On Bitcoin Trading

Zimbabwean authorities’ ongoing tussle with mobile money operators (MMO) reached a crescendo when a government official shocked the world by announcing a suspension of this service.  The suspension, which took immediate effect, was immediately rebuffed by Ecocash, the largest of the three mobile money operators (MMOs). Sensing potential divisions within the ranks of regulators, Ecocash […]

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Zimbabwean authorities’ ongoing tussle with mobile money operators (MMO) reached a crescendo when a government official shocked the world by announcing a suspension of this service. 

The suspension, which took immediate effect, was immediately rebuffed by Ecocash, the largest of the three mobile money operators (MMOs). Sensing potential divisions within the ranks of regulators, Ecocash quickly called out this irregular and potentially illegal announcement.

In a statement attributed to Ecocash, the MMO says it is only guided by instructions from the country’s central bank, the Reserve Bank of Zimbabwe (RBZ).

A Confusing Stance on Mobile Money Creates Uncertainty

RBZ photo from bulawayo24.com

The RBZ issued its belated statement wherein it regurgitates accusations against MMOs leveled by the government. In its statement, the RBZ says MMO agents that enable cashing in (deposits) or out (withdrawals) are indeed suspended.

Nevertheless, the central bank appears to take a more conciliatory approach as it tried to walk back the most contentious aspects of the government announcement.  The RBZ clarified that regular transactions like payments to merchants or between peers remain active.

This clarification, while adding to the confusion, was largely expected. The earlier announcement had been made against the background of long-standing and biting cash shortages.

Mobile money, which now accounts for more than 80% of all national micropayments, has largely filled the void created by cash shortages. Some argued that had the initial suspension order stood, a serious crisis would have ensued. 

Nevertheless, it seems that there are other factors at play that seem to feed this animosity between MMOs and regulators. Ecocash, which is owned by Zimbabwe’s largest mobile network operator, Econet Wireless, enjoys a lion’s share of the mobile money market. 

It is this monopolistic position that appears to be the source of Ecocash’s constant fights with regulators. Ecocash has a massive agent network infrastructure making it the most popular payment platform in the country.

The RBZ has been using different tactics including suspension of Ecocash alone in 2019 as it tries to curtail the influence of the MMO.

Consequently, the two have faced off numerous times in local courts over the past twelve months. Against this background, it would appear the assertions that RBZ’s persistent efforts to tame Ecocash are premised on a desire to kill off this innovative solution to financial exclusion.

Necessity The Mother of Innovation

The success by Ecocash in Zimbabwe potentially exposes the RBZ’s lack of foresight and an unwillingness to adapt. Furthermore, the success of MMOs will only encourage others to bring forth their own innovative solutions. 

Indeed the last few years have seen several fintech companies emerging. Each, bringing their own ideas of how they intend to solve the problem of financial exclusion.

However, it appears the fintechs are coming up against standing regulations that are essentially anti-innovation. Moreover, banks still observe a 2018 directive to stop the facilitation of Bitcoin to fiat exchange.

It is this directive that forced earlier Bitcoin adopters as well as crypto traders to go underground. Cryptocurrency trading deals are now initiated in social media messaging applications while transactions are typically settled peer to peer.

While Zimbabwe has a few cryptocurrencies users, events over the past few months have sparked a growing interest by those seeking to shield their wealth from the runaway inflation.  

Cryptocurrencies are not only denominated in US dollars—which are seen as a stable currency by Zimbabweans—but are censorship-resistant. 

Some Zimbabweans now realize that their government cannot suddenly suspend the use of Bitcoin (if it becomes widely used) just as it has done with mobile money. This knowledge might be responsible for the steady growth of Bitcoin or altcoins being demanded or swapped with USD. 

Before the latest suspension directive, some peer to peer traders accepted mobile money due to the ease with which it can be converted into USD.

Additionally, mobile money makes it convenient for traders to swap digital assets without having to meet face to face.

However, a recent RBZ warning against advertising or soliciting for foreign currency via Whatsapp chat groups spooked crypto traders. Some were already scaling back on accepting mobile money when the government made the surprise announcement.

The latest directive might now force more traders to exit from public trading groups. However, if anything, this directive will instead spur more trading between peers. The only difference it will be harder for everyone to detect or to know the level of trading.

Zimbabwe’s challenging economic environment and the tough foreign currency regulations might have increased the utility of cryptocurrencies. 

For instance, there are reports that a start-up, YoLft Technology, which is based in South Africa, recently launched a stable token known as Uhuru.

This token is housed on the Stellar Blockchain and it enables Zimbabweans working in South Africa to send money home at a fraction of regular costs. 

The token is easily convertible to the South African Rand currency. Some business people are opting to make payments directly to suppliers in South Africa using this token.

This decision by some businesses further cements Zimbabwe’s credentials as an ideal place for cryptocurrency adoption.

Changed Stance on Cryptocurrencies

While the RBZ itself has since, the last quarter of 2019, made overtures to the crypto community, observers remain deeply skeptical. They point to the longstanding directive that crippled Golix—the country’s one-time number one cryptocurrency exchange—which remains in force.

That is also a point emphasized by a UK based blockchain and cryptocurrency enthusiast, Prosper Mwedzi. 

A Zimbabwe native, Mwedzi also believes the decision to cut off millions from their mobile money wallets works in favor of cryptocurrencies. However, he insists that there will be no movement as long the 2018 moratorium remains in place.

Meanwhile, a Bitcoin trader who did not wish to be identified asserts that there is a positive correlation between government censorship and interest in cryptocurrency.

He says he has been seeing a gradual increase in the number of people asking for Bitcoin in particular.

Nevertheless, it should not be forgotten that Zimbabwe’s hyperinflation is another driver of cryptocurrency adoption. The unprecedented government action against Ecocash will ultimately force its citizens to see Bitcoin as the best shield against the out of control hyperinflation.

The Zimbabwe dollar (Zwl) has depreciated by more than 100% since mid-June. It now trades at 63 Zwl for every American dollar. 

Before the start of the foreign currency auction system, the exchange rate had been fixed at 25 Zwl for every one dollar.

Hyperinflation, which effectively renders the Zimbabwean Dollar worth less and less, is getting ever closer a 1000% per annum. This inflation rate makes the Zimbabwean hyperinflation the second worst to that of Venezuela.

Choosing Bitcoin or cryptocurrency as a shield is only a natural choice in this case.

Also Read:

The post Zimbabwe’s Mobile Money Ban And The Impact On Bitcoin Trading appeared first on BlockNewsAfrica.

Source: https://blocknewsafrica.com/zimbabwes-mobile-money-ban-and-the-impacts-bitcoin-trading/

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Investors must brace themselves as Bitcoin Cash goes downhill in the coming weeks

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Though off to a strong start in September, Bitcoin Cash seemed to have taken its foot off the pedal. Caught between two corrective phases on 7 and 20 September, the price steadily declined after forming a local peak above $800.

Moreover, BCH’s latest drawdown towards 38.2% Fibonacci level identified vulnerabilities in the market which could extend all the way back to July lows. With sentiment also expected to be sour due to a recent death cross, BCH bulls certainly faced a tall mountain to climb. At the time of writing, BCH traded at $549.2, down by 4.8% over the last 24 hours.

BCH Daily Chart

Source: BCH/USD, TradingView

A near 16% decline from the 50% Fibonacci level pushed BCH to the all important 38.2% Fibonacci level. Back in late-June, BCH suffered a 31% sell-off after it pierced below the aforementioned level on the back of a descending triangle. Hence, to dissuade short-sellers from the market, BCH would need to keep its neck above the $540-mark.

However, certain factors in the market could not be overlooked. For instance, each of BCH’s indicators slipped below their equilibrium points for the first time in nearly 2-months, while a negative crossover between the 20-SMA (red) and 200-SMA (green) created some more uncertainties.

Reasoning 

Even though corrective phases have been overserved previously in the market, BCH’s RSI held above it mid-line. This was not the case anymore after the RSI shifted below 45 and into bearish territory. In fact, the RSI was yet to touch the oversold territory, which meant that BCH could see some more losses rather than an immediate reversal. Such was the case with the MACD and Awesome Oscillator as well, which slipped below their equilibrium levels. If sentiment continues to be weak, the 23.6% Fibonacci level and $400 would come back into play.

Conclusion 

Bitcoin Cash’s long term narrative took quite a hit after prices declined below the 50% Fibonacci mark. In fact, this also negated a bullish setup which was highlighted in an earlier article. BCH’s indicators also fell into bearish zones  after this retracement. Considering these factors, BCH was open to a further sell-off towards the $400-mark in the coming weeks.

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Source: https://ambcrypto.com/investors-must-brace-themselves-as-bitcoin-cash-goes-downhill-in-the-coming-weeks

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Indian government cautious about crypto-adoption, CBDC is a possibility

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Indian traders and exchanges might be bullish about the crypto market, but the Indian  government doesn’t seem keen on rushing into the scene. At least, not until studying its homegrown fintech industry and the anti-Bitcoin protests in El Salvador.

Tracking global news

Indian finance minister Nirmala Sitharaman in a recent interview with Hindustan Times explained why the country seemed to be falling behind when it came to crypto adoption.

Though she admitted, El Salvador wasn’t “the best example,” Sitharaman said,

“You’d think common people don’t care about digital currency; but the public took to the streets against the move. It’s not a question of literacy or understanding – it’s also a question of to what extent this is a transparent currency; is it going to be a currency available for everyone?”

Sitharaman referred to CBDCs as a “legitimate” cryptocurrency and admitted there could be a “possibility,” in hat regard. She noted that India held the “strength of the technology” and acknowledged the need to formulate a Cabinet note. However, Sitharaman wondered if India was ready to follow El Salvador’s way.

Facts on the ground

Though accessibility is a pressing concern, more Indians have discovered crypto than perhaps expected.

Nischal Shetty, CEO of the Indian crypto exchange WazirX – a subsidiary of Binance Holdings – has stated that WazirX sign-ups from India’s tier-two and tier-three cities overtook those from tier-one cities this year. Even so, sign-ups from tier-one cities themselves saw a 2,375% rise. Furthermore, WazirX added one million users in April 2021 alone.

Adding to this, the cost of electricity and Internet data in India are relatively cheaper, which could boost both crypto trading and mining in the future. However, at the last count, there was only one Bitcoin ATM in the whole country.

As per data by Useful Tulips, which combined data from Paxful and LocalBitcoins, India saw transfers worth around $4,502,369 in the last two weeks.

Could anti-Bitcoin protests happen in India?

There is evidence to support both sides. India has a strong history of mass protests, with the farmers’ protests against the government’s agricultural laws being one such example. The 2016 demonetization of part of the country’s paper currency still haunts many, and Internet penetration is yet to cross 50%.

However, India also has the largest diaspora in the world, with approximately 18 million people living outside the country. Crypto innovation could lead to hundreds of millions of dollars being saved on remittance charges as money is sent across borders.

But for the time being, it seems India’s urban residents are more bullish about crypto than its government.

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Source: https://ambcrypto.com/indian-government-cautious-about-crypto-adoption-cbdc-is-a-possibility

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A Deep Dive Into The Bitcoin Wallets Of U.S Congress Members, And Why Bitcoiners Are Strongly Against Them

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A Deep Dive Into The Bitcoin Wallets Of U.S Congress Members, And Why Bitcoiners Are Strongly Against Them

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Key takeaways

  • U.S. Congress’ split disposition towards cryptocurrencies raises concerns among market participants.
  • Bitcoin proponent, James Loop goes digging into the financial disclosures of Congress members.
  • His findings revealed only three Congress members have ever disclosed that they hold Bitcoin.

The United States is a key base for innovation and adoption in the cryptocurrency industry. According to data from Crunchbase, there are at least 1,135 organizations founded in the U.S. that provide various cryptocurrency-related services.

Despite the broad adoption of the asset class by the country’s citizens, the government is still divided on opinions about the growing cryptocurrency industry. This can be seen in the U.S. Congress where members of Congress are split between those who support and those who do not support Bitcoin, the most prominent cryptocurrency.

This polarised disposition of Congress has been a pain point for Bitcoiners. Bitcoin market participants have pointed out several issues that emanate from the fact that there are still members of Congress who have not shown themselves to fully understand Bitcoin.

The sentiment is that Congress members who do not fully understand the asset, having not used it, should not be responsible for making laws about it. Additionally, market participants also think it will be a conflict of interest if members of Congress who oppose Bitcoin are found to be holding Bitcoin or if those who support it do not own any. 

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Jameson Lopp, the co-founder, and chief technology officer of Casa – a leading provider of Bitcoin self custody solutions, has gone digging into the United States Senate Financial Disclosures portal. The investigation was carried out to identify Congress members who have declared holdings of cryptocurrencies, and Bitcoin in particular, in their portfolios. 

His findings paint a dismal picture as the majority of the members of Congress who have been vocal in supporting Bitcoin have not held the asset at all according to their financial disclosures for the year ending 2020.

According to his findings, only 3 Congress members have disclosed that they own Bitcoin. The now-retired Representative Bob Goodlatte of Virginia was the first Congressman to disclose the ownership of Bitcoin, doing so in 2017 even before laws were passed to make disclosure mandatory. According to his disclosure, he owned between $1,000 and $15,000 of Bitcoin at the time.

Among currently seated Congress members, only Senators Cynthia Lummis and Pat Toomey have reported Bitcoin holdings in their portfolios in 2020. Senator  Lummis reported owning $100,000 – $250,000 of bitcoin in 2020 making up between 0.6% and 2.75% of her net worth. Similarly, Senator Pat Toomey reported purchasing $1,001 – $15,000 of GBTC in June 2021. The GBTC investment is between 0.01% and 0.7% of his net worth.

The sleuth however concedes that he did not have the time and resources to go through the financial disclosures of all 535 congressional members. Nonetheless, it is telling that of the ones he checked, even members of caucuses in Congress that are affiliated to cryptocurrency and members that have drafted bills that will provide clarity for the industry do not hold Bitcoin or other cryptocurrencies as their financial disclosures show.

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Source: https://zycrypto.com/a-deep-dive-into-the-bitcoin-wallets-of-u-s-congress-members-and-why-bitcoiners-are-strongly-against-them/

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