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Fintech

Government and Startups are Partnering Effectively to Develop Blockchain in Nigeria By Iyke Aru

By: Bhodemarz on October 11, 2017 / comment : 0 , , ,

Blockchain activities in Nigeria is beginning to put the nation on a solid technical foundation. This is causing some to suggest that Africa stands to benefit more than any place in the world from the emerging technology.
The signs of a welcoming community are evident in the openness and unbiased approach of the nation’s government so far towards understanding the intricacies of the ecosystem. The Nigerian government is trying to map out a balanced operational environment where the most benefit can be achieved from the emerging technology.
Awareness and protection
One of the major stakeholders within the industry that has worked extensively with the Nigerian government is the Cryptography Development Initiative of Nigeria (CDIN). Through one of its organs, the Nigerian Blockchain Alliance (NBA), CDIN has been involved in the fight against crypto scams in Nigeria since 2015.
According to Adeolu Fadele, President of CDIN, the major objective of his group is to help Nigeriansleverage the opportunities presented by Blockchain and digital currency. Ultimately, this will reposition the nation for overall growth and development while protecting them from risks.
Fadele notes that as a trailblazer in the Nigerian Blockchain and digital currency ecosystem, CDIN has played the role of a “forerunner organization.” They have created awareness among the relevant government agencies on the need to understand and respond to the disruptive nature of the global digital revolution without stifling innovation. Fadele elaborates:
“Today, we are proud to say that the friendly regulatory environment enjoyed by the Nigerian Blockchain and digital currency ecosystem could be partly attributed to our early engagements with the policy makers and law enforcements agents. We have worked in collaboration with the commercial banks, Nigeria Electronic Fraud Forum (NeFF) and the Nigerian Police Force to fight cryptocurrency SCAM. Significant success was recorded in discouraging the growing criminal activities in the Nigerian Blockchain and Digital currency ecosystem and funds were successfully recovered for victims in many cases.”
He continues by explaining that these proactive efforts have discouraged criminals from taking advantage of the regulatory gap to give Nigeria a bad name.
To further these efforts, the group is organizing the Nigeria Blockchain Alliance Conference, bringing together national institutions, private establishments, professionals, businesses, global partners and the general public. The conference is intended to create awareness, discourage crime, protect consumers and unlock new job and business opportunities in Nigeria.
Education and tech development
Another group that has collaborated with the Nigerian government in enhancing Blockchain development is the company Tech Hub.
Samuel Benedict, Founder of Tech Hub, tells Cointelegraph that his company’s objective is to provide Blockchain-driven solutions Nigeria and Africa at large. Benedict says:
“Our mission is to bring pragmatic Blockchain solutions to the doorstep of Africans, So far we are [receiving] a lot of positive feedback from the government and currently we are having series of meetings with the ministry of communication and technology.  We are also in negotiation with First Bank of Nigeria Plc in order to provide an [ATM] card system that will be linked to wallets for users to have direct fiat currency withdrawals.”
Benedict also notes that the Blockchain industry shows great promise in Nigeria and several startups are building services on Blockchain already. According to him, the larger Nigerian population needs more Blockchain education beyond just cryptocurrency and to learn how to stay away from possible scams.


Source: cointelegraph.com

Making A Case For The Regulation Of Cryptocurrency In Nigeria

By: Bhodemarz on October 09, 2017 / comment : 0 , , , , ,

Cryptocurrency [1] is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency[2].
The use of Cryptocurrency as gained strength in Nigeria. The use of Cryptocurrencies in Nigeria may not be unconnected with the move by the central bank of Nigeria to stop the capital outflow of foreign currencies from Nigeria.
The extreme volatility of digital currency has forced many governments to warn its citizens of the use of the unregulated currency or money known as digital currency with some countries taking the extreme measure of banning its use and making it a crime to hold, own or purchase Bitcoins or any related cryptocurrency. Bitcoin has been called “digital gold,” and for a good reason. To date, the total value of the currency is close to $9 billion
Pictured below is a list of the most used cryptocurrencies in the world, with Bitcoin taking the lead.

Unlike other cryptocurrencies Bitcoin is different: It wholly replaces central bank currencies with a digital version that’s tougher to forge, cuts across international boundaries, can be stored on your hard drive/Flash Drive instead of in a bank, and perhaps most importantly to many of Bitcoin’s users isn’t subject to the inflationary whim of a Central bank or government decides to print more money.

Problems Associated With Digital Currencies
It can be used for money laundering, activities such as drug dealing, to finance terrorism because many digital currencies offer anonymity services.
Proliferation of Ponzi schemes are easier to propagate as fake digital currencies may be used to attract unsuspecting consumers as it isn’t under any government’s control.
It is Difficult to tax as it is not recognized as a currency, although it can be classified as a good or products which can be used as barter goods.[3].
It is not recognized by any regulatory agency in Nigeria, so fraudulent activities by businesses and individuals are likely to succeed and continue unabated until cryptocurrencies are regulated in Nigeria.

Usage
According to localbitcoins[4] Nigeria’s weekly Bitcoin exchange volumes since mid-December 2016 have increased from more than  ₦400 million, which is close to $1.3 million[5] to Over  ₦1 Billion which is  about $3 Million

Regulation across the World
On 25 September 2013, the analytical department of Ministry of Finance of Czech Republic published legal guidance for buying and selling digital currencies. Transactions worth more than 1,000 EUR are considered “AML high-risk”[6] in accordance to S 6 para. of Act No. 253/2008 Code while transactions worth more than 15,000 EUR are considered “AML suspicious” in accordance to Section 18 of Act No. 253/2008 Code.
In America, the Bit License, a local regulatory framework formulated by New York’s Department of Financial Services is already in place to regulate digital currency businesses operating in the state.
The European Union has passed no specific legislation relative to the status of the bitcoin as a currency within its territory. In October 2015, the Court of Justice of the European Union ruled that
 “The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT” and that “Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used whileas legal tender’”, making bitcoin a currency as opposed to being a commodity[7].
On the other hand The United Kingdom, has created a regulatory framework that bends over backward to make it easy and quick for innovative startups and entrepreneurs to comply with the appropriate consumer protection regulations and safely enter the market.”
As against the ruling of the Court of Justice of the European Union stated above, bitcoin is not yet recognized as a currency in Nigeria. However, I believe that it can be classified as a good or product thus, taxable under the Capital Gains Tax Act, 2004[8] which would lead to the generation of more revenue for the Nigerian Government

Conclusion
Regulation may be needed to protect consumers and the wider financial system in essence bitcoin and other cryptocurrencies should not remain in a legal vacuum, without the appropriate supervision and unless serious action is taken by the CBN and other potential regulatory agencies to make it clear to the Nigerian people and companies on the modalities on use of digital currency [9].
It is important the government issues modalities for individuals and companies participating in the trading of digital currencies.
The money laundering act [10] would also need to be amended so as to allow for the recognition of digital currencies. A benchmark for trade in digital currencies should also be set so as to enable security agencies flag investigate the trading and use of digital currencies to prevent terrorism amongst other nefarious acts. The Money Laundering Act [11] would also need to be amended to cover digital currencies.
With an unclear regulatory stance on cryptocurrencies in Nigeria and the constant delay being exhibited by the CBN in reeling regulations, it remains unseen how Nigeria expects to positively utilize the unruly product called cryptocurrency. The ownership or possession of bitcoin, etherum or related cryptocurrencies is therefore not illegal in Nigeria.

[1] (or crypto currency)
[2] Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies. Today, there are over 700 digital currencies in existence [2].
[3] http://www.lawyard.ng/wp-content/uploads/2016/01/CAPITAL-GAINS-TAX-ACT.pdfLast Accessed January 30 2017
[4] Localbitcoins.com A website dedicated to viewing Cryptocurrency transactions near a persons location
[5] http://www.thisdaylive.com/index.php/2017/02/01/weekly-bitcoin-volumes-cross-1m-in-nigeria-raise-speculations/
[6] Anti-Money Laundering Law
[7] In Europe Bitcoin and other cryptocurrencies are a form of currency.
[8] http://www.lawyard.ng/wp-content/uploads/2016/01/CAPITAL-GAINS-TAX-ACT.pdfLast Accessed January 30 2017
[9] Nigeria’s alleged interest in regulating digital currencies comes amid similar efforts elsewhere across the world
[10] Money Laundering Act 2011 Amended 2012
[11] Money Laundering Act 2011 Amended 2012


Source: lawyard.ng


Mobile Banking Grows as Phone Users Hit 29 Million

By: Bhodemarz on August 25, 2017 / comment : 0 , , ,

by Raheem Akingbolu

The Managing Director of Nigeria Inter-Bank Settlement System (NIBSS), Mr. Adesonubi Adebisi, has stated that Nigeria has recorded growth in mobile banking, compared to some African countries. He spoke at the Fintech Summit 2017, where he analysed the data of the Fintech industry in the past few years and admitted that mobile users in Nigeria are now about 29 million.
He said: ‘’Internet banking is slowing down; mobile banking is growing and USSD is also growing while ATM usage remains stagnant in the past three years. Now, consumers engage more with the mobile world because it is fast and convenient, card transaction/POS is also growing while cheque transaction remains stagnant.’’
He noted that the larger value transactions are reducing while the smaller value transactions are increasing every time because customers are able to engage themselves with mobile banking which increases in bank transactions. The NIBSS boss added that the numbers of bank customers are not increasing but numbers of bank accounts are increasing.
According to him, in the capital market, the number of registered shareholders is approximately 2.1 million while 838,674 could only be identified and 433,164 are the unique individual in the capital market. This, according to him, is a result of the integration of the BVN to customers’ account in order to monitor real time payments.
Earlier, the Chief Executive of Kantar TNS, Mr. Aggrey Maposa stated that despite the late commencement of the nation’s financial technology sub sector of the economy, it has, in the last three to four years, grown by over 90percent. Maposa also disclosed that there are over 400 Fintech organisations in Nigeria currently working with Africa Fintech organisation.
According to him, the global consumer and marketing Strategy Company organised the summit in response to the evolution and growth of the global internet of things, (IoT), to discuss the future of financial Technology in the country.
The summit tagged: “Payment of Tomorrow and Changing Consumer”, brought together Financial Technology experts and leading business executive to discuss the Fintech Industry in Nigeria with a view to positioning the industry, players and the consumers for tomorrow.
Maposa explained that the world has changed and Fintech is taking over and changing the financial activities of the consumers.
He said: “Fintech has come to stay, it is not a fashion because it is based on real need for change” he noted that the Nigeria Fintech industry is coming a bit late, but the industry in Nigeria is still doing so well and in just about three to four years of introduction, “we have recorded a growth of 90% and this is to show we are coming up”, he said.
Over the years, FINTECH (E-nnovation) engagement spanned across many sectors, which include the E commerce, Property Rentals, Customer Loyalty and awareness programme. However, Nigeria is still predominantly using cash over cashless transactions with 80percent of transactions record being in cash and 20% cashless, compared to other countries.
Also speaking on the theme, Chief Strategy and transformation officer at Kantar, Mr. Jonathan Chocquel Mangan said that realising opportunities for growth requires unique consumer focus and insight.
“We must understand the consumer’s need at each point in time so as to meet those needs. In order to get your customer to drop their suppliers and choose you, you need to get insight on what they need’’ he said, emphasising that the where, what and how to get insight to consumer experience is very important.
He noted that bank transactions in the country are predominantly offline compared to Ghana and Kenya but more generally, Nigeria consumers are very mobile centric. In Nigeria, cash is still the king but ATM, Mobile Banking are closing the gap very quickly.
Focusing his presentation on “Mobile Opportunities in Nigeria”, the CEO Kantar Africa, Mr. Charles Foster explained that mobile research is no longer the future in Africa rather it is here now. According to him, half of the mobile are already Smartphones in Nigeria not far from US.
He maintained that mobile research can do more than face to face research in collecting data. He also predicted that by year 2020, 730 million growth in mobile subscribers would be achieved and this is possible by knowing what consumer needs.
Responding to questions on whether Fintech is sustainable, Project Director, Africa Fintech Founding, Mr. Victor Okigbo said that Fintech is not a fade, it has come to stay and there can only be more innovations to it.
The interactive session established that the rate of Fintech growth in Nigeria compared to Kenya and South Africa is still behind. This was however attributed to security lapses.
On the challenge of digital payment, Maposa admitted that cyber security remains a problem globally. He added: “There are lot of security measures Fintech has in place beyond what the consumer knows, the only way is to educate the people that they are secured, he explained adding that Fintech and financial institution need to have strong back-end so as to monitor any suspicious financial activities.”
He explained that Fintech doesn’t take away jobs, rather it redefines financial operations. “Jobs are changing faster, so people need to change and it is necessary to acquire more skills to be relevant,’’ he said.
Source: thisdaylive.com
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