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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 […]

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

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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.

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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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BitGo To Introduce Crypto Custodial Services To New York Clients

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Digital asset trust company, BitGo has added another feather to its cap. The company announced today that it has received a Trust Charter that will enable it to operate as an independent qualified custodian in the United States’ commercial hub, New York. The license was issued by the New York State Department of Financial Services.

Go, BitGo

California-based digital asset solutions provider, BitGo has expanded its horizon. It will now render cryptocurrency custodial services to New York-based institutional clients. The news was confirmed after the state’s Department of Financial Services issued the New York Trust charter to the company.

The news reiterates the company’s motive to exhaust the possibilities of the new financial landscape. It announced in December last year that it had over $16 billion in assets in its custody. With the surge in institutional interest, BitGo now has its eyes set on the world’s financial and commercial epicenter. Speaking on the latest milestone, BitGo CEO Mike Belshe said:

“We are extremely proud to receive the approval for a trust charter from NYDFS to serve the world’s premier financial organizations that are based in New York State. The past year has been exceptional for BitGo and the digital asset markets overall, primarily due to the influx of large financial services institutions that bring a new level of credibility, liquidity and stability to the crypto ecosystem.”

The license will enable New York’s premier institutions to key into the digital revolution while staying within the state’s regulatory framework. BitGo’s list of reputable partners adds an extra layer of trust. It claims to be backed by Goldman Sachs, Craft Ventures, Digital Currency Group, Redpoint Ventures, and Valor Equity Partners.

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What’s In Store?

BitGo intends to go all-in for its prospective clients. Asides from its fully secured custodial services, it outlined several benefits of the New York Trust.

It will adopt a sophisticated, independently verified system control – SOC 2 Type 2. The SOC 2 Type 2 compliance records how a company safeguards customer’s data. This system control type verifies compliance with standard procedures and often gives a competitive edge.

Prospective clients will benefit from BitGo’s “comprehensive insurance coverage,” which it says covers up to $100 million in digital assets. Its multi-signature technology is yet another selling point.

New York – The New Crypto Hub?

The city of New York is becoming a destination for mainstream cryptocurrency companies. This week, leading blockchain sports and entertainment platform, ChiliZ announced that it would set up an office in New York.

Perhaps this is fueled by the state’s unwavering efforts to maintain a regulated framework that attracts investment and prioritizes asset protection. The New York Financial Services Law, which was enacted five years ago, necessitates the regulation of companies in the digital asset space. The state’s Department of Financial Services approved the sale and trading of eight cryptocurrencies in August last year.

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Source: https://cryptopotato.com/bitgo-to-introduce-crypto-custodial-services-to-new-york-clients/

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Co-founder of Floyd Mayweather-promoted ICO sentenced to 8 years

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Sohrab Sharma, the co-founder of the notorious celebrity-spruiked initial coin offering of 2017, Centra Tech, has been sentenced to eight years in prison for his leading role in the fraudulent scheme that duped investors out of more than $25 million.

Shama had previously pled guilty to conspiring to commit wire fraud, securities fraud, and mail fraud for material misrepresentations made by him and his co-conspirators to solicit investors to participate in the scheme.

United States attorney, Ilan Graff, described Sharma as having “led a scheme to deceive investors by falsely claiming that the start-up he co-founded had developed fully functioning, cutting-edge cryptocurrency-related financial products.”

“In reality, Sharma’s most notable inventions were the fake executives, fake business partnerships, and fake licenses that he and his co-conspirators touted to trick victims into handing over tens of millions of dollars.”

The court found that Sharma and co-defendants Robert Farkas and Raymond Trapani founded Centra around July 2017, claiming that the firm offered a crypto debit card and other digital asset-related products. The group conducted an ICO from July 2017 until October 2017, distributing unlicensed securities in the form of CTR tokens.

To promote the offering, the group issued materials falsely claiming the team had partnerships with Visa, Mastercard, and Bancorp, money transmitter licensing in 38 U.S. states, along with an entirely fictional CEO boasting more than 20 years experience in the banking sector and a master’s degree from Harvard University.

While the team raised $25 million at the completion of the ICO, authorities found those crypto assets were worth more than $60 million at certain times during 2018.

The U.S. Marshals Service seized 100,000 Ether from Centra which it sold for roughly $33.4 million earlier this year. The proceeds will be made available to potential use in a remission program to compensate victims of the fraud.

Sharma was also sentenced to three years of supervised release and ordered to forfeit more than $36 million.

In December, Centra co-founder Robert Farkas was sentenced to one year in prison for his role in the scheme. Trapani has also pleaded guilty.

Celebrities DJ Khaled and Floyd Mayweather, who promoted the offering on social media in 2017, agreed to six-figure settlements without admitting to wrongdoing in 2019 after Centra’s investors filed a lawsuit against the pair.

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Source: https://cointelegraph.com/news/co-founder-of-floyd-mayweather-promoted-ico-sentenced-to-8-years

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Spike in digital land and NFT sales push Axie Infinity (AXS) price to new highs

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The popularity and sale of NFTs have exploded over the past few months as many artists and collectors have been consistently selling entire NFT collections for millions of dollars.

One platform that has emerged as a fan favorite is Axie Infinity (AXS), a blockchain-based trading and battling game inspired by games like Pokémon and Tamagotchi. In the game, players collect, breed, raise, battle and trade token-based creatures known as Axies. 

In the past two months, the market cap for AXS has increased 600% from $19.25 million to its current value of $115 million as users rush to the platform for a chance to win a rare and valuable Axie. 

Data from Cointelegraph Markets and TradingView shows that the price of AXS has surged 74% over the past 24-hours, going from $1.78 on March 3 to a new all-time high of $3.10 on March 4 on the back of a 1,000% surge in the 24-hour trading volume. 

AXS/USDT 4-hour chart. Source: TradingView

While AXS has been in an uptrend for months, the altcoin really started to gain momentum at the beginning of February following the launch of Ronin, an Ethereum (ETH) network sidechain designed to help AXS users escape high transaction costs and network congestion on the Eethereum network.

Since Ronin’s launch on Feb. 1, the number of active users on the platform has skyrocketed as NFTs began to explode in popularity and mainstream news channels reported on record-setting sales for one-of-a-kind pieces of digital art.

Axie Infinity active users. Source: Axie Infinity

Digital land in Lunancia, the player-controlled virtual realm of the Axie universe, is also attracting increased attention with one user recently spending a total of $1.5 million to purchase nine digital land plots.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for AXS on March 3, prior to the recent price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. AXS price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ score for AXS reached a high of 76 on March 3, just hours before the price began to rise from $1.84 to its new all-time high at $3.10.

Despite the recent pullbacks experienced in the wider cryptocurrency market, key on-chain metrics like Glassnode’s Reserve Risk indicator show that the Bitcoin rally is still in its early, suggesting that there is plenty of room for BTC to appreciate before it reaches the peaks seen in previous bull markets.

Continued strength for Bitcoin price is likely to translate into an increased interest in NFTs and as the nascent sector expands, projects like AXS could continue to rise in popularity.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Source: https://cointelegraph.com/news/spike-in-digital-land-and-nft-sales-push-axie-infinity-axs-price-to-new-highs

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