The International Monetary Fund over the weekend said that the cryptocurrency boom poses new challenges to financial stability.
Analysis of data by the IMF showed that total market value of all the crypto assets surpassed $2 trillion as of September 2021—a 10-fold increase since early 2020, adding that 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.
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 per cent 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.