Bank of Singapore’s Chief Economist Says Cryptocurrencies Could Edge Out Gold

Bank of Singapore’s Chief Economist Says Cryptocurrencies Could Edge Out Gold

But certain risks, such as trust, volatility, and regulatory clarity, need to be addressed first.

The Bank of Singapore is the latest institution to favor cryptocurrencies in its push to usurp gold. Optimism over the asset class is high, with the industry showing signs of more growth.

While Bitcoin and several other large-cap cryptos appear to be on the upsurge again, sentiment about the crypto market is gaining momentum.

However, many are still hung up on the leading cryptocurrency’s recent performance, and talks of the asset usurping gold as the global reserve currency have continued.

No Way Over Fiat, but Time’s Up for Gold

The latest body to weigh in on the prospect of Bitcoin overtaking gold is the Bank of Singapore. According to a report from The National news, the bank recently published a research note where it touted cryptocurrencies as a possible replacement for gold down the line.

In the report, the Bank of Singapore argues that cryptocurrencies are unlikely to replace fiat currencies – practically pouring cold water on the hopes of those who are touting the digital yuan and other Central Bank Digital Currencies (CBDCs).

Mansoor Mohi-uddin, the bank’s chief economist, explained that cryptocurrencies are an inefficient unit of exchange, and central banks won’t be able to print them at will in times of crisis. However, he also explained that digital assets are more likely to become the major safe-haven asset. With the market showing significant potential over the past few years, there is every reason to believe that cryptocurrencies could easily overtake gold.

To do this, the bank believes that cryptocurrencies will need to overcome some hurdles. For one, it pointed out the need for trusted institutions that will provide custody for investors. Many cryptocurrencies would also need to be more liquid, allowing high levels of trading and other activities to take place. Improved liquidity will also reduce volatility, a problem that the crypto industry has had for years.

Everyone Loves Crypto

The Bank of Singapore isn’t the only institution pumping Bitcoin to overtake gold eventually. In a recent opinion piece, Anthony Scaramucci and Brett Messing, two executives at New York-based hedge fund SkyBridge Capital, explained that Bitcoin is ripe for investment as its ownership is now as safe as gold and government bonds.

SkyBridge Capital filed with the Securities and Exchange Commission to launch its Bitcoin fund last December. When the fund launched fully earlier this month, the New York firm claimed that it had as much as $310 million in exposure to the leading cryptocurrency.

Investment banking giant JP Morgan has also touted Bitcoin’s chances of taking up more of gold’s market share. In an investment note, the company’s strategists said:

“The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced. If this medium to longer-term thesis proves right, the price of gold would suffer from a structural headwind over the coming years.”

Institutional investment is sure to push Bitcoin and the entire crypto market even higher. With government regulation expected soon, the future definitely looks bright for this fledgling market.

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Author: Jimmy Aki

Big Uptick in 1k BTC Addresses Shows Institutions Bought the Dip

Big Uptick in 1k BTC Addresses Shows Institutions Bought the Dip; Goldman Sachs says Still Just 1% of Institutional Money

Despite the healthy pullback, more correction cannot be ruled out yet but $30k will be protected because many institutional investors bought around this level.

Bitcoin is taking a breather and hovering around $35,000 after the deep pullback earlier this week. This profit-taking at an ATH of $42,000 was expected after Bitcoin rallied more than 1,000% from the March 2020 lows.

“There’s signs that retail investors are taking profit,” said Ryan Rabaglia, OSL’s global head of trading. “Heightened volatility is often correlated with an uptick in retail participation.”

The market is particularly focusing on the US Dollar Index right now, which has been gaining strength, currently hovering around 90.

“We think a pullback is healthy,” said David Grider, the digital strategist at Fundstrat Global Advisors. According to him, the recent price action doesn’t indicate that Bitcoin has topped out.

However, further losses can’t be ruled out either, with miners continuing their selling while no significant stablecoin inflows in the picture. No outflows are seen from Coinbase either; as a matter of fact, BTC is flowing into exchanges.

On the basis of this, “We might have second dumping,” said Ki Young Ju, CEO of data provider CryptoQuant.

Still, $30k will be protected, and in the event of a dip, we might not go down below $28k because “there are many institutional investors who bought BTC at the 30-32k level,” Young Ju added.

These institutions were actually into buying the dips that came on Sunday and Monday. The large amounts of BTC holders that can be seen as a proxy for institutional adoption “increased significantly” since the start of 2021. This jump in address with at least 1,000 BTC shows that this institutional adoption is here to stay.

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However, according to Goldman Sachs’ Jeff Currie, the level of institutional investment in the market is still very small though “the market is beginning to become more mature.”

“The key to creating some type of stability in the market is to see an increase in the participation of institutional investors, and right now they’re small,” said the investment bank’s head of commodities research on CNBC., adding that the investment in BTC is, “roughly 1% of it is institutional money.”

While for institutions, Bitcoin is a hedge against fiat debasement and risk of inflation, as it emerges as a store of value, for some, it is a way to fix economic injustice as well.

“For the first time in history, we have a Plan B option to the current financial system which has seen years of redlining, racial discrimination and other egregious acts by retail banks to the Black community,” said Isaiah Jackson, author of “Bitcoin & Black America.”

According to him, Bitcoin gives Black people an opportunity to not only shift their money but also their mindset because the world’s leading digital currency is unconfiscatable and has no barrier to entry.

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Author: AnTy

Bittrex Delisting Privacy Coins Monero (XMR), Zcash (ZEC), and DASH Without Any Explanation

Kraken CEO dispels any regulatory pressure, says market removal could be something business-specific. Meanwhile, these coins drop 17% to 23% while DASH argues its “privacy functionality is no greater than Bitcoin’s.”

Cryptocurrency exchange Bittrex has announced the removal of privacy coins from its platform after removing XRP markets for its US customers. Monero (XMR), Zcash (ZEC), and DASH are the affected cryptocurrencies.

Starting Jan. 15, 2021, 23:00 UTC, BTC-XMR, ETH-XMR, USDT-XMR, BTC-ZEC, ETH-ZEC, USDT-ZEC, USD-ZEC, BTC-DASH, ETH-DASH, USDT-DASH, and USD-DASH would no more be available on the platform.

After this, Bittrex users would have up to 30 days, a period that may be shortened in “certain instances,” to withdraw any of these delisted tokens. The exchange states, after the withdrawal deadline, “there may be circumstances under which a user may not be able to withdraw a token due to events outside of Bittrex’s control.”

Up until now, only XRP XRP 5.48% XRP / USD XRPUSD $ 0.23
$0.01 5.48%
Volume 5.09 b Change $0.01 Open $0.23 Circulating 45.4 b Market Cap 10.34 b
8 h Bittrex Delisting Privacy Coins Monero (XMR), Zcash (ZEC), and DASH Without Any Explanation 2 d eToro and CEX Suspend Trading for US Customers; Grayscale Buys 3.23 Million XRP 3 d Binance US, Genesis, & Abra Suspends XRP Support; Bittrex & Uphold Clarifies No Plan to Delist
trading and deposits were suspended and only for the US customers due to SEC’s lawsuit against Ripple and its two executives for allegedly selling unregistered securities, but now more cryptos are being targeted. Trader CryptoSqueeze noted,

“Privacy coins are the next on the target list. Bittrex might just be the beginning. This is gonna be a rough and uncertain year for alts.”

Bitcoin BTC 7.79% Bitcoin / USD BTCUSD $ 33,331.76
$2,596.54 7.79%
Volume 77.75 b Change $2,596.54 Open $33,331.76 Circulating 18.59 m Market Cap 619.63 b
7 h GBTC Added $1.6B in December But Grayscale Hasn’t Purchased Any BTC in Over a Week 8 h Bitcoin Smashes $34,810 as Market Sees Some ‘Serious and Prolonged Investor Activity’ 2 d Altcoins’ Market Cap Still 59% Off its Peak as Bitcoin Dominance Exceeds 70%
and Ethereum ETH 25.18% Ethereum / USD ETHUSD $ 949.37
$239.05 25.18%
Volume 40.77 b Change $239.05 Open $949.37 Circulating 114.1 m Market Cap 108.33 b
2 d Altcoins’ Market Cap Still 59% Off its Peak as Bitcoin Dominance Exceeds 70% 4 d Bitcoin Going to $1 Million in the Next Decade Says Kraken CEO; Highlights ETH & DeFi 4 d Ethereum Is A ‘Huge Success Story’ But is ‘Undervalued’ in Terms of Institutional Buying
are free from any such uncertainties because they have been explicitly stated by regulators to not be a security because they are decentralized.

Meanwhile, Bittrex’s lack of explanation on their motive behind this decision has led the crypto twitter (CT) to speculate.

“Privacy is a constitutional right, not a crime,” said Jake Chervinsky, General Counsel at Compound Finance who shares his disappointment on exchanges removing crypto assets with privacy-preserving features. “There’s no law or regulation requiring this, just DOJ’s opinion that privacy is “indicative of possible criminal conduct,’” he added.

According to Josh Swihart, SVP of Growth at Electric Coin Company, the creators of Zcash, there could be more than what meets the eye here. He pointed out how US-based crypto exchanges Gemini and Coinbase recently added additional support for ZEC.

Meanwhile, other crypto exchanges clarified that there isn’t any regulatory pressure to delist these privacy-focused cryptos.

“Haven’t heard of anything on the regulatory side. Presumably, it’s something specific to their business,” said Jesse Powell, co-founder, and CEO of crypto exchange Kraken. He also shared that these cryptos meanwhile are not supported by Kraken in Australia because of being “banned by local fiat funding rails” and that they are working on the alternatives.

For now, the damage has been done to these cryptos price-wise as they performed poorly following the delisting news.

XMR dropped over 11% in the last seven days and is currently trading around $138, DASH lost 17% of its value in the last seven days and is now trading at $89 and after a 13% drop, ZEC is now keeping around $58.

Some believe XMR, DASH, ZEC’s loss can be Litecoin’s gain which is working on bringing privacy to the network. Ever since Bitcoin bulls went crazy in Oct., LTC also moved in tandem, up 183% in the last three months to climb the levels not seen since June 2019.

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Author: AnTy

VanEck Files for a Bitcoin ETF Again; This Time It Will Physically Hold BTC

The $49 billion investment firm says the Bitcoin market has matured, pointing to better infrastructure, regulated exchanges, and support from OCC.

So, it has started!

After no new proposal in 2020 following the rejection of all the Bitcoin ETF proposals by the US Securities and Exchange Commission (SEC) in the past couple of years, the market is back to try again.

Now that institutions are pouring in amidst the strong bull market, VanEck is yet again making an attempt at a Bitcoin exchange-traded fund (ETF). The market feels that this time, we could finally get approval.

The big difference in VanEck’s proposal is that unlike the last time when they filed for a Bitcoin futures ETF, this one would physically hold the world’s largest digital asset.

The $49 billion investment firm has already successfully launched a Bitcoin ETN in Europe and is now ready to bring in another herd. Gabor Gurbacs, digital asset strategist at VanEck tweeted,

“Bringing to market a physical Bitcoin ETF in the U.S. is a top priority for @vaneck_us. We are committed to support bitcoin-focused innovation & continue to work with regulators & market participants to achieve that goal.”

In its SEC filing, VanEck argues that the Bitcoin market has matured and is “operating at a level of efficiency and scale similar in material respects to established global equity, fixed income and commodity markets.”

Here, it points to the launch of BTC futures contracts on major and regulated exchanges, growth of trading volume, arrival of major, established market makers, development of a robust bitcoin lending market, and expansion in the availability of institutional-quality custody services.

Moreover, the Office of the Comptroller of the Currency has confirmed that national banks may provide custody services for bitcoin and other virtual currencies, it said.

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Author: AnTy

SEC vs Ripple Pretrial Conference Set for Feb; Majority of Customers & XRP Volume Not in the US

Ripple says the action against it is “an attack on the entire crypto industry” and the lawsuit has “affected countless innocent XRP retail holders” that have no connection with the company.

The list of crypto service providers announcing no more support for XRP in light of the SEC suing Ripple and its top two executives now include Coinbase, Bittrex, OKCoin, Crypto.Com, Bitstamp, OSL, Beaxy, Swipe, CrossTower, Stex, Ziglu, Eobot, Sarson Funds, Jump Trading, Galaxy, B2C2, Bitwise, 21Shares, Bitcoin Suisse, Wirex, Simplex, and Grayscale.

An Indonesia-based exchange is also informing its customers of the risk of XRP delisting “in connection with the United States Securities and Exchange Commission (SEC) lawsuit against Ripple Labs, Inc which was deemed to have violated the regulations regarding securities.”

In response to market-wide delisting, Ripple published a statement where it says the “majority of our customers aren’t in the U.S. and overall XRP volume is largely traded outside of the U.S.”

While Ripple will continue to operate and support all products and customers in the U.S. there are “clear rules of the road for using XRP in the UK, Japan, Switzerland, and Singapore,” says the San Francisco-based company.

The company further reiterated that the SEC action against Ripple is “an attack on the entire crypto industry here in the United States.”

This lawsuit has “already affected countless innocent XRP retail holders with no connection to Ripple” and muddled the waters for traders, exchanges, and market makers said the fintech company adding that they will defend themselves and get clarity for the US crypto industry.

Meanwhile, the initial pretrial conference of SEC vs Ripple Labs Inc. is set for February 22nd, 2021.

“The point of this conference is to determine if there is a hope of settling and discovery dates,” said Jesse Hynes, an NJ Attorney.

In this process, the parties will basically learn everything they can about the other side’s facts and get to request documents and take depositions (interviews). “Judge Torres generally sets a 120 day period for fact discovery (which may be shortened if there are exigent circumstances),” said Hynes adding from there, another 45 days are allowed for Expert discovery.

It is after the final pretrial submission date, which is 30 days after, that the trial is set. As such, if case this goes to trial, at best the market is looking at September 5, 2021, “but that is unlikely” because “there are always delays and consents to push back dates and extend discovery.”

So, it will be a long battle that could take years to come to a result. Meanwhile, XRP price is suffering, having fallen to levels not seen since 2017, currently trading around $0.20.

In the meantime, XRP enthusiasts have launched a petition “Granting Ripples (XRP) token as a non security by the SEC” on Change.org. So far, the petition has only got 132 signatures.

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Author: AnTy

Ripple Partner MoneyGram ‘Doesn’t Utilize ODL or RippleNet’ Despite Being Paid Millions in XRP

Ripple Partner MoneyGram Says it ‘Doesn’t Utilize ODL or RippleNet’ for Which it was Paid Millions in XRP

“It’s still business as usual,” says Ripple CEO, maintaining that the company remains “on the right side of the law and of history.”

Amidst the ongoing distancing from XRP, Ripple partner MoneyGram also issued a statement.

“The Company has not currently been notified or been made aware of any negative impact to its commercial agreement with Ripple,” said MoneyGram, one of the largest companies involved in cross-border P2P payments and money transfer.

The statement came in light of the recent lawsuit filed by the U.S. Securities and Exchange Commission against Ripple Labs Inc.

“MoneyGram is not a party to the SEC action,” said the company adding, they will continue to monitor for any impact as things unfold.

MoneyGram came into a commercial agreement with Ripple in June 2019 to use the fintech’s foreign exchange (FX) blockchain trading platform, On-Demand Liquidity (ODL) for the purchase or sale of four currencies. For this, Ripple paid millions of dollars in XRP to MoneyGram. However, the company revealed that, as a matter of fact,

“MoneyGram does not utilize the ODL platform or RippleNet for direct transfers of consumer funds – digital or otherwise.”

Throughout this collaboration, MoneyGram actually continued the use of other traditional FX trading counterparties and says it “is not dependent on the Ripple platform to accomplish its FX trading needs.”

“There were a discussion on Twitter about precisely how MoneyGram used ODL, other ways they could use it, and the advantages and disadvantages of each mechanism,” commented David Schwartz, CTO of Ripple on MoneyGram distancing itself from the company.

This week, XRP got into hot water as the SEC charges Ripple and its two executives, board member and former CEO Chris Larsen and current CEO and board member Brad Garlinghouse for allegedly selling unregistered securities.

This resulted in the price of the digital asset crashing more than 60% and taking the entire crypto market down with it, only to recover the gains to trade around $0.30 XRP -6.52% XRP / USD XRPUSD $ 0.30
-$0.02 -6.52%
Volume 9.97 b Change -$0.02 Open $0.30 Circulating 45.4 b Market Cap 13.43 b
6 h Ripple Partner MoneyGram Says it ‘Doesn’t Utilize ODL or RippleNet’ for Which it was Paid Millions in XRP 10 h Oldest Crypto Exchange Bitstamp to Suspend XRP Trading & Deposit on Jan. 8 2 d XRP Carnage Begins as the Delisting Commences
.

All of this also resulted in the suspension of XRP trading and deposits on several trading platforms. Just yesterday, the oldest crypto exchange Bitstamp suspended the XRP services for its US customers, starting January 8.

OSL, Beaxy, and CloseTowers are other exchanges that suspended XRP trading on their platform while Bitwise Asset Management also liquidated its position in the digital asset.

Garlinghouse meanwhile, maintains that Ripple remains “on the right side of the law and of history.”

“It’s still business as usual,” said Ripple CEO in a publicly shared note sent to the company’s employees this week.

“The SEC is completely wrong on the facts and law and we are confident we will ultimately prevail before a neutral fact-finder.”

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Author: AnTy

USDC Circulating Supply Increases by 3.14B; Stablecoin ‘Way Ahead of the Pack’ in Regulatory Compliance

USDC Circulating Supply Increases by 3.14B in 2020; CEO Says Stablecoin Is ‘Way Ahead of the Pack’ in Regulatory Compliance

USDC’s supply has surged 687% in less than ten months. Circle CEO Jeremy Allaire says the latest regulations “pave the way for stablecoins to become a major part of the payments and settlement infrastructure of the financial system.”

Stablecoin USD Coin, created by Center Consortium, a collaboration of Coinbase and Circle has surpassed 3.6 billion in circulation.

“USDC crossed 3.5B in circulation, newly 500m new in circulation in past couple of weeks,” tweeted Jeremy Allaire, co-founder, and CEO of Circle.

A few hours later the same day, Allaire took to Twitter again to state that the coins in circulation had crossed $3.6 billion.

In mid-March, the market cap of USDC was just around $457 million, representing an increase of 687% in less than ten months.

2020 has been a year of stablecoins as the combined supply of these coins surpassed 20 billion recently.

Another interesting metric is the on-chain volumes of these stablecoins which have crossed the $1 trillion mark, this year, for the first time ever, analyzed The Block. Last year, the volume was a mere $248 billion.

The dominant stablecoin in the market, Tether (USDT) remains the king here as well by accounting for 76% of all the stablecoin on-chain volume followed by USDC at 15% and then DAI at just 7% share of the market.

As for the blockchain, Ethereum is the obvious leader with 83.5% of stablecoin on-chain volume share followed by Tron and Omni at 14.5% and 2.1% respectively.

Regulators onto Stablecoins

This increased popularity and usage of fiat-backed cryptos have brought regulatory scrutiny on the stablecoins.

Just this week, President Trump’s Working Group on Financial Markets published a statement where it says stablecoins must meet the same regulatory standards as other financial systems. It requires the issuers to obtain and verify the information of the parties involved in the transaction of stablecoins across unhosted wallets.

“Nearly everything that is being proposed is highly aligned with how Centre operates and USDC is issued today. Broadly, this is a very significant development in terms of acknowledging USDC as emerging significant payment infrastructure in the US,” commented Allaire on these new proposed rules.

He further went on to say that all the regulators are asking for are already the “hallmarks” of the company and they are “way ahead of the pack.”

These regulations “pave the way for stablecoins to become a major part of the payments and settlement infrastructure of the financial system,” said Allaire.

However, the rules on transaction reporting for unhosted wallets, which cross-references the midnight rule-making by Treasury Secretary Steven Mnuchin, “will be vigorously fought.”

“We are looking forward to picking this conversation up with the Biden Administration, and the many many leaders and civil servants across the US Treasury, SEC, CFTC and others as we usher in the next major phase of the global financial system.”

Jeremy Allaire Co-founder and CEO of Circle

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Author: AnTy

JPMorgan: Bitcoin’s Rise Coming at Gold’s Expense; BTC Price Overshot, Bullion Due for Recovery

JPMorgan Chase says the rise of digital assets could make gold suffer.

While money poured into Bitcoin in October, gold saw a record amount of outflows. According to the bank’s quantitative strategists, including Nikolaos Panigirtzoglou, this trend is only going to continue in the long run as more institutional investors take a position in the largest crypto asset.

Over the past few months, many have recognized Bitcoin as a good alternative to gold, and JPMorgan is just one of them. As we reported, even Ray Dalio is warming up to digital gold, with Citi, Wells Fargo, Deutsche Bank, and others seeing Bitcoin as a diversifier to the yellow metal.

Compared to bitcoin’s 156% return YTD without even hitting $20k yet, bullion only raked in 20.5% gains in 2020 after reaching a new peak.

“The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced,” wrote the JPMorgan strategists.

According to the bank’s calculations, for now, Bitcoin only accounts for 0.18% of family office assets compared to gold ETF’s 3.3%.

However, bitcoin is seeing a lot of demand, as seen with the Grayscale Bitcoin Trust, which saw an inflow of almost $2 billion since October, while gold ETFs had a $7 billion outflow during the same period.

“If this medium to longer-term thesis proves right, the price of gold would suffer from a structural flow headwind over the coming years,” wrote JPMorgan’s strategists.

Bitcoin Flow from Gold Funds
Source: Bloomberg

In the short-term, the bank sees Bitcoin prices overshot, hence a selling with gold due for a recovery.

However, many believe both gold and bitcoin should be part of a portfolio. Even Dalio said Bitcoin has similarities to gold and other store holds of wealth.

“Gold buyers do not care what JPM thinks. Americans don’t buy or own much gold. 92% of demand is outside of US. Bitcoin the fastest horse and can go up 20x-would be worth $6 trillion. If so gold doubles to $20trillion in mkt value. Plenty of value to go around,” said Dan Tapiero, co-founder of 10T Holdings.

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Author: AnTy

Former Goldman Sachs President Not a ‘Strong Believer’ in Bitcoin; It ‘May Fail’

Gary Cohn, former economic chief to Donald Trump, says Bitcoin may fail, despite the digital asset having more than a decade long history, growing adoption, and increasing value from mere cents to $19,550 today.

On being asked about his views on Bitcoin, which is on a tear, and how the digital asset and cryptocurrency fundamentally transform our economy, Cohn had the typical ‘love blockchain but hate bitcoin’ reply. Former Goldman Sachs President and Chief Operating Officer in an interview with Bloomberg on Tuesday said,

“When we talk about blockchain we come back and talk about the infrastructure, that’s the highways and the pipes that are necessary for bitcoin but they’re necessary for many other applications and I think they’re very useful and I’m very bullish on them.”

As for Bitcoin, he doesn’t have a “strong opinion” on the flagship cryptocurrency, which has a market cap of $360 billion. He said,

“In essence, I’m not a strong believer in bitcoin… it is a developing asset potentially and for all the reasons it’s a strong developing asset class it may fail.”

He further explains that part of an asset class’s integrity to a system is knowing who owns it, why it’s being transferred, and if it is used for legitimate causes or corrupt practices. The 60-year old said,

“The bitcoin system today has no transparency to it, so there are a lot of people that question why would you need a system that does not have an audit trail, does not have integrity.”

According to him, Bitcoin “lacks some of the basic integrities of a real market” because “you don’t know who owns it, you don’t know exactly how much exists today, how much has been mined how much has been lost, how much has been thrown away on hard drives because they don’t exist anymore so it.”

This is the weakest argument ever for starters, he is talking about cash, and second, if Cohn had bothered to get himself acquainted with Bitcoin, he would have known the most extensive network is a transparent one, and that’s why the different government agencies have been able to catch people trying to route their funds in BTC to avoid authorities.

Haters are just going to hate and miss being part of this revolution until it’s too late.

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Author: AnTy

Binance Uganda Will Shut Down Its Operations Next Week; CZ Cited Lack of Users

  • Binance Uganda set to shut its doors next week.
  • Binance CEO, CZ, says closure of BinanceUG is part of a “business decision.”

After a two-long year stay in operations, Binance Uganda, one of the African outposts for the world’s largest crypto exchange, will be shutting its doors on November 11. The closure follows a mission by Binance to cut down on losses, which also sees British Isle-based exchange, Binance Jersey, shut down its businesses on November 30th.

The East African country has enjoyed the exchange’s services from the fall of 2018, offering a direct platform for Ugandans to use the Shilling to purchase cryptocurrencies. The launch of Binance UG targeted efforts to promote crypto adoption across the continent, using the country as a starting point to taking over the African market.

Why Binance UG is shutting down

In an interview explaining the recent closure of the Ugandan branch, Binance CEO, Changpeng “CZ,” Zhao explained it as a “business decision.” He further claims the platform is a loss-making center for the larger Binance.com firm as it does not “generate enough revenue to be profitable.”

However, the closure of the Ugandan and Jersey exchanges raised qualms on Binance relationship with regulators – as explained in a Forbes article. The article accuses the exchange of “conceiving of an elaborate corporate structure designed to intentionally deceive regulators and surreptitiously profit from crypto investors in the United States.”

However, CZ dismissed the FUD claiming that Binance only operates where regulators have offered a license. As the issue with regulators is set to rise once more following Binance UG closing down, CZ explained,

“Some people misinterpreted that as maybe we got into trouble with the regulator locally or something. And that’s not the case.

We do have good relationships with regulators in both areas that we have an exchange winding down. It’s just a business decision.”

Moreover, Binance.com launched support for deposits and withdrawals of the Ugandan shilling, which duplicates the functions of Binance UG. With most users switching to the main Binance platform and more services offered on it, the need for a local crypto platform does not make sense.

“All the features that Binance Uganda provides [are] now covered by Binance.com together with our fiat channel partners,” CZ said. “There’s a very minimal number of users on there, so it doesn’t make sense for us to maintain two platforms.”

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Author: Lujan Odera