The total market value of bitcoin and other cryptocurrencies is approaching an unprecedented $2 trillion, just a few months after topping $1 trillion for the first time.
According to Coindesk, as of 16:50 coordinated universal time (12:50 p.m. ET), the 9,115 cryptocurrencies tracked by the website CoinMarketCap.com, had a combined market value of $1.996 trillion, up about 2.6% over the past 24 hours.
The total value of all cryptocurrencies topped $1 trillion in early January, bolstered by a powerful bull market in the 12-year-old bitcoin (BTC) as well as rallies in alternative digital assets including ether (ETH), the native currency of the Ethereum blockchain.
Recent announcements of moves into cryptocurrencies by established financial players like Visa, PayPay, Goldman Sachs and Morgan Stanley have strengthened traders’ confidence that the industry is seeing greater mainstream adoption.
Bitcoin’s rally over the past year has been fueled by speculation that the oldest and largest cryptocurrency might be useful for investors as a hedge against inflation, in the wake of trillions of dollars of coronavirus-related stimulus injected into financial markets by governments and central banks.
Ether, the second-biggest cryptocurrency, and other digital assets have soared in value partly due to expectations that the tokens can be used in decentralized finance, or DeFi, consisting of automated, blockchain-based software protocols that might someday replace banks and Wall Street trading firms.
How Crypto Market Can Help Tackle Nigeria’s Rising Youth Unemployment
Young people now account for a staggering 42.5 percent of Nigeria’s unemployment rate as of the fourth quarter of 2020.
While the total unemployment rate surged to an unprecedented 33.3 percent from 27.1 percent in the second quarter, the highest rate of unemployment was recorded among those between the ages of 15 to 24 years with 53.4 percent followed by those aged 25 to 34 years with 37.0 percent.
A combination of unemployment and underemployment rates shows that those aged 15-24 years reported a combined rate of 73.2 percent, showing a serious challenge for the age-group in secure full-time employment.
The report by the National Bureau of Statistics (NBS) is the closest indication that the unemployment problem in Africa’s largest economy has reached a crisis stage and would require every help it needs to address the problem.
The country’s inflation rate also jumped to a four-year high in February as food prices rose more than 20 percent, worsening the situation of those teeming youths who are unemployed. The situation means many young people are unable to contribute to the growth of the country’s economy raising the risks of brain drain or talent flight.
A report by the International Organisation of Migration notes that young Nigerians make up the largest population of the growing flow of migrants from Africa to developed countries. As of 2016, over 20,000 young people involved in the Mediterranean Sea crossing were reported to be from Nigeria. From 2017 until March 2021, hundreds of Nigerian migrants have been deported from various destinations including Italy, Libya, and South Africa.
But while most young Nigerians may have lost faith in the ability of the economy to rescue them from widening poverty, a growing number are turning to blockchain and the evolving cryptocurrency ecosystem to build wealth.
Experts say the growth of the crypto market in the last four years have benefited mostly young people, particularly millennial.
Millennials, born between 1981 and 1996 (about the age of people that account for 37.0 percent of Nigeria’s unemployed figures) now find cryptocurrency three times more popular, as a long-term investment vehicle, compared to any other generation.
A survey conducted in the United Kingdom of affluent millennials discovered that 20 percent have invested in cryptocurrencies. The survey revealed that among the people born between 1981 and 1996, 20 percent had invested in the crypto space provided they had investable assets of £25,000 or more. This is significantly greater than the national average of 3%. Moreover, it is higher than 29 percent for millennials with over £75,000 in investable assets
The story is similar in Nigeria, a market that is currently the largest in peer-to-peer trading in Africa. Out of 74 countries in the Statista Global Consumer Survey, Nigerians were the most likely to say they used or owned cryptocurrency.
The greater activity is driven by millennials, most of whom are hedging against intractable currency fluctuations and hyperinflation.
“Bitcoin is not correlated with capital market fluctuations. There is much more volatility these days in equities than bitcoin. It is a great hedge that provides near-instant liquidity similar to cash,” Victor Asemota, founder of SwiftCorp said in a tweet.
For these young Nigerians, the cryptocurrency market is more than trading bitcoin and other altcoins, as it has begun to create jobs, inspire entrepreneurs to create startups, and spawn hundreds of tokens with unique functions and development. A survey by Binance found that the majority of crypto users (51%) see it as a regular source of income.
“I like the volatile nature of cryptocurrency and with the help of cryptocurrency trading, I’ve been able to earn money at home, even much more than the salary I earn as a teacher. I have been able to feed my family and conveniently pay my other bills,” Murphy Edafe, a crypto trader on Binance said.
There are more than 20 cryptocurrency exchanges in Nigeria employing hundreds of young Nigerians. Some of the exchanges are founded and run 100 percent by young Nigerians.
There are also blockchain projects in the country that have many Nigerians working on them. Lucky Uwakwe, a blockchain expert says there are hundreds of Nigerians willing to learn about blockchain, many of them, however, are discouraged by the lack of well-established training facilities. Only a few who can afford it, apply to schools abroad to study.
A forward-looking regulatory approach has seen countries like the US benefit from new jobs in the blockchain.
According to data from Austin-based job search site Indeed, there was a 90 percent increase in blockchain, bitcoin, and cryptocurrency job postings between February 2018 and February 2019. Job postings in blockchain categories rose 4,086 percent in the share of job postings per million from the previous three years.
Uwakwe who is currently studying Blockchain online with an institution abroad says that investors are willing to come and set up training in Nigeria but the regulatory environment does not yet support such investments.
Visa Emerges First to Conduct Settlement Transaction in USD Coin
Visa has become the first major payments network to settle transactions in USD Coin (USDC), a stablecoin backed by the US dollar.
Visa conducted the transaction in partnership with Crypto.com, using the USDC to settle the transfer over open source blockchain Ethereum.
Visa has spent the last year working with digital asset bank Anchorage to build a pathway for digital currency settlement across its fiat-only payment rails, effectively acting as the on and off ramps for payors and payees using stablecoins.
The pilot transaction with Crypto.com enabled the firm to settle a portion of its obligations for the Crypto.com Visa card programe via USDC.
Visa plans to offer the USDC settlement capability to additional crypto-native companies later this year as an alternative to traditional fiat in treasury and settlement workflows.
Jack Forestell, Visa EVP and chief product officer, says: “The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world.”
Bank of Jamaica Moves Ahead With CBDC Project
Bank of Jamaica (BOJ) has selected a technology provider chosen to support the testing a central bank digital currency (CBDC) solution in the Bank’s Fintech Regulatory Sandbox for a pilot in May to end December 2021 is eCurrency Mint Incorporated.
eCurrency Mint will also be the provider when the national CBDC roll-out begins in early 2022. eCurrency Mint is a global thought leader and pioneer of the hardware, software, and cryptographic security protocol technology to enable central banks to securely issue, distribute and supervise CBDC, a digital fiat currency that will operate alongside notes and coins as digital legal tender.
After quietly exploring the viability of a central bank digital currency (CBDC) for some time, Bank of Jamaica (BOJ) took the decision in May 2020, as a part of our ongoing retail payments reform, to venture into this digital innovation that is fast becoming a feature of global central banks.
CBDC is a digital form of central bank issued currency and is therefore legal tender. It is not to be confused with cryptocurrency, which is privately issued and not backed by a central authority. CBDC is fully backed by the Central Bank, the sole issuer.
The legislative review to amend the Bank of Jamaica Act to concretize BOJ as sole issuer of CBDC is well underway. CBDC will not be a cost to consumers and will be a full complement to bank notes and coins issued by BOJ. Both CBDC and physical notes and coins will co-exist in the payment space. CBDC will have the major aspects of money, as now obtains with bank notes and coins, with the only significant difference being that it is an alternative to cash to be used primarily for transactions, and will not attract interest when stored in any account. It will, however, like cash, be a store of face value, a medium of exchange, a single unit of account, and a standard of payment.
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