Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: After Donald Trump's election victory and the US, traders are
Speaker 2: betting on good times for cryptocurrencies. With bitcoin breaking the
Speaker 2: ninety thousand dollars barrier.
Speaker 3: The market value of bitcoin is now the eighth most
Speaker 3: valuable asset in the world, and it surpassed the total
Speaker 3: world's value of silver at one point seven six trillion dollars.
Speaker 1: It's incredible as even those in the crypto community watch
Speaker 1: what was happening.
Speaker 4: This week with AWE because it was such a stunning rise.
Speaker 2: With the currencies growing increasingly popular among younger people. Are
Speaker 2: African governments, wary of unregulated markets able to stand this
Speaker 2: latest onslaught.
Speaker 1: The crypto space, the fintech space is a new deal,
Speaker 1: and being a new deal last regulators, we're always very cattious.
Speaker 1: We need to understand it properly, We need to review
Speaker 1: it properly. We need to also be able to deal
Speaker 1: with the risk associated with that. One of the aims
Speaker 1: of the SEC's investor protection, and of course the other
Speaker 1: one is market development. And in the space of that
Speaker 1: twin aim we must do what we need to do
Speaker 1: to protect Nigeria's and to encourage Nigerians as the case
Speaker 1: may be.
Speaker 2: On this episode of the Next Africa Podcast, we'll look
Speaker 2: at how young people in Nigeria and Kenya are still
Speaker 2: using crypto despite attempts to ban it and what governments might,
Speaker 2: if anything, be able to do about it. I'm Jennifer
Speaker 2: Zabasaja and this is the Next Africa Podcast, bringing you
Speaker 2: one story each week from the continent, driving the future
Speaker 2: of global growth with the context only Bloomberg can provide.
Speaker 2: And joining us this week is Bloomberg's Bella Genga in
Speaker 2: Nairobi and also amel Onu who is in Legos. Thank
Speaker 2: you both for being here. A really fascinating topic that
Speaker 2: I think a lot of people are plugged into right now,
Speaker 2: especially considering the price action. Maybe let's just start with
Speaker 2: the popularity of cryptocurrencies like bitcoin on the continent right now.
Speaker 2: I mean, how would you assess how popular it is
Speaker 2: and really who the people are that are using it? Bella,
Speaker 2: maybe you start.
Speaker 4: It's pretty popular. Young people especially are using it because
Speaker 4: they are tech savvy and it's efficient. They just go
Speaker 4: and participate it on the platform's online. They don't have
Speaker 4: to get out of the house of the room and
Speaker 4: go and find it and they are trading and making money,
Speaker 4: which without leaving the house. So that's why it's very
Speaker 4: popular among young people.
Speaker 2: Tenure Emeli, how about you from from West Africa? What
Speaker 2: what's your perspective?
Speaker 5: Crypto is very popular among young Nigerians. It's mainly young
Speaker 5: Nigelians that are patronized in it, mainly those that are
Speaker 5: looking for smart ways of transacting business and good returns
Speaker 5: and a still protect the investments. So thats where we
Speaker 5: normally see the drive coming from.
Speaker 4: I spoke to two guys and they've been in the
Speaker 4: crypto game since like twenty twenty and so they are
Speaker 4: enjoying the benefits or they're enjoying the escalation of crypto
Speaker 4: because they can change and they can trade. Basically, these
Speaker 4: guys are making a lot of money. These young people
Speaker 4: are making a lot of money. They don't have to
Speaker 4: go to banks because in Kenya the Central Bank issould
Speaker 4: as circular telling banks we don't want to hear you
Speaker 4: guys are doing anything concerning crypto. So all of it
Speaker 4: is peer to peer at this point, So that's.
Speaker 2: One use case. I mean people are making money also
Speaker 2: transferring money peer to peer. MLA, are you seeing similar
Speaker 2: patterns and what sort of tokens are people using.
Speaker 5: It is mainly bitcoin, Yeah, every other one is like
Speaker 5: an exception. They're not popular and emla.
Speaker 2: I mean, what is the attraction from the perspective of
Speaker 2: the people that you've spoken to. Is it about making money?
Speaker 2: Is it about speculation? Is it a game? Is it
Speaker 2: to evade sort of their own woes that the local
Speaker 2: currencies are experiencing. I mean, what do you.
Speaker 5: Think, Ageria, those actually going for a bit or tripito currency,
Speaker 5: their fraction is mainly as a start of value, that
Speaker 5: is merely to preserve their wealth. So I bet that
Speaker 5: is the elemental speculation because they are doing need to
Speaker 5: have kind of sharp appreciation and their assets within a
Speaker 5: very short time, but they maintain is that lots of
Speaker 5: confidence on the naira, lots of confidence of the local
Speaker 5: currency is making people go to it, especially the young people.
Speaker 5: They want to try new things.
Speaker 4: Bella.
Speaker 2: A few months ago we had you on the podcast
Speaker 2: and you were talking about a lot of the movement
Speaker 2: that we were seeing in Kenya in response to cost
Speaker 2: of living and how a lot of it was young
Speaker 2: people and how they were communityting online. I mean, I
Speaker 2: wonder if we're seeing some of that same chatter happening
Speaker 2: right now, especially as we see the prices of these
Speaker 2: cryptocurrencies I mean continuing to escalate. I mean, are you
Speaker 2: hearing them talking potentially about this being an opportunity to
Speaker 2: store value like a MELI was saying.
Speaker 4: Yes, it's definitely an opportunity. I mean, look, if you
Speaker 4: look at it, bitcoin is up above ninety three thousand,
Speaker 4: so you can imagine the people who are already participating
Speaker 4: in that space in twenty twenty. And if you look
Speaker 4: at the employment rate and employment rate in Kenya, it's
Speaker 4: pretty high. The Tenet government is under pressure to increase
Speaker 4: revenue collection in the form of taxes, and so the
Speaker 4: price living expenses have gone up. And when you consider
Speaker 4: people who don't have jobs, people these young people who
Speaker 4: get a lot of income online, this is a space
Speaker 4: that they're particularly very keen on and are playing at.
Speaker 4: The people who are basically smiling and laughing all the
Speaker 4: way to the bank are people who started playing before.
Speaker 4: Actually two thousand and I met one of the one
Speaker 4: of the participants or one of the investors in this
Speaker 4: space got in very very early. I mean, you're building
Speaker 4: a house.
Speaker 2: It's okay, Bella MLA stick with us when we come back.
Speaker 2: We're going to talk about how regulators are reacting to
Speaker 2: this increased use and if there's anything they can really
Speaker 2: do to stem the increasing use and the tide that
Speaker 2: we're seeing with crypto. Welcome back today on the podcast.
Speaker 2: We're looking at the impact of the booming cryptocurrency markets,
Speaker 2: especially since the US election, and we're seeing the prices
Speaker 2: of not just bitcoin but other cryptos rising, lifting all tides.
Speaker 2: As we could say a la, Nigeria has had a
Speaker 2: pretty fractured relationship with crypto. I think it's safe to say,
Speaker 2: can you can you give us some history about where
Speaker 2: the country has been and where it's at now.
Speaker 5: Twenty twenty, young Nigerians used bitcoin to fund a major
Speaker 5: protest against police rutality. So central bank was unable to
Speaker 5: track those flues and it was a major concern to
Speaker 5: the authorities. So in twenty twenty one, CENTA bank or
Speaker 5: that banks to close all accounts operating crypto. They said
Speaker 5: it was a threads to the stability or the financial system.
Speaker 5: Then the next year what we saw was et cetera
Speaker 5: Bank non fined four banks for failing to comply with
Speaker 5: the order to bank crypto assets. Notwithstanding that the analysis
Speaker 5: we got indicated that more Nigerians we were piling up
Speaker 5: into crypto. The Central Bank d year blocked assets to
Speaker 5: crypto a change that is binance, making it very difficult
Speaker 5: or impossible for subscribers or cretain users to continue to
Speaker 5: reutonize that platform. And they also sued them for manipulating
Speaker 5: the national currency. The Nigerians Securities and the Change Commission,
Speaker 5: which is the regulator for the capital market, has always
Speaker 5: seen the crypto asset as a security that should be
Speaker 5: regulated and SEX believes that if it is regulated, it
Speaker 5: will make the participants and the market not to be
Speaker 5: sabottaging the economy, which actually has been the fears of
Speaker 5: the central bank. Sec also felt that there are a
Speaker 5: lot of young people in it, so if you don't
Speaker 5: regulate it, what it means is that a lot of
Speaker 5: them could be taken advantage of. So eventually, what we
Speaker 5: say is that there is not an agreement to regulate
Speaker 5: the market. And this year the license to crypto exchanges.
Speaker 5: They want to get good understanding of how they pread
Speaker 5: and if they're satisfied with what they then they will
Speaker 5: grant them a permanent license.
Speaker 2: WOW and that would be huge, of course for the industry,
Speaker 2: and it's not as you just described there in La,
Speaker 2: it's not been smooth sailing. Of course, we've seen a
Speaker 2: lot of disruption as you were just mentioning there. But
Speaker 2: also earlier this year we talked a lot about the
Speaker 2: situation with the Binance executive and how that played out. Bella,
Speaker 2: let's bring you in. Can you talk to us from
Speaker 2: the Kenyan perspective, because it's also not really been smooth
Speaker 2: sailing for crypto in East Africa either.
Speaker 4: Absolutely. I remember in twenty fifteen, the Kinon Central Bank
Speaker 4: issued US cycula actually basically declared during a press briefing
Speaker 4: that look, one of the entities that were making it
Speaker 4: available was basically a crypto exchange. It was fatilitating crypto
Speaker 4: trading and all that. It declared that this company has
Speaker 4: no license and therefore they do not have they cannot
Speaker 4: do any business in this country. And then that who's
Speaker 4: followed up by a circular to all commercial banks asking
Speaker 4: them not to do any kind of business with anything
Speaker 4: sounds like, smells like, looks like crypto. And what has
Speaker 4: happened is today if the crypto enthusiasts are still using
Speaker 4: the banks the founder way of using the banks. But
Speaker 4: if a bank realizes or finds out that a particular
Speaker 4: entity or company is trading or dealing with crypto, they
Speaker 4: shut down the bank account. We've had some of the
Speaker 4: exchanges getting shut down because they're not getting licenses and
Speaker 4: there's no regulation in this space for crypto. They have
Speaker 4: been forced to find a way around it, and one
Speaker 4: of the ways is to open different bank accounts with
Speaker 4: different banks, and that's how they're able to survive or
Speaker 4: you know, continue to earn from this trade. The other
Speaker 4: thing is any regulator who finds out that you are
Speaker 4: participating or have any business to do with crypto, they
Speaker 4: will shut down as well. There's still no regulation on
Speaker 4: crypto currency. It's not allowed, it hasn't been banned, so
Speaker 4: that its people who are participating in crypto or dealing
Speaker 4: with crypto are playing in a great space. So the
Speaker 4: absence of regulation, it's not hampering people, and people are
Speaker 4: still able to deal and participate in that place in
Speaker 4: that space.
Speaker 2: Basically, before we wrap up, maybe MLA, can you take
Speaker 2: us through what you're watching for next. There's a lot
Speaker 2: that's up in the air, including the price of some
Speaker 2: of these cryptocurrencies. But what should we be watching for next?
Speaker 5: What everybody is watching for, including those that are into
Speaker 5: a crypto and those that are not tayfun into a crypto.
Speaker 5: What everybody is watching up for is the type of
Speaker 5: regulation that you'll be placed from next year when SEC
Speaker 5: will give permanent licenses to need to operate US. If
Speaker 5: it is satisfied with however Writting is operated, then those
Speaker 5: two operators ill be giving permanent licenses next year and
Speaker 5: be given a guideline how to operate. That is the
Speaker 5: next thing everybody is looking at for web SEC deny
Speaker 5: those two people the permanent licenses or will it make
Speaker 5: the conditions stiffer for them to operate?
Speaker 4: For as long as the authorities do not have visibility,
Speaker 4: they cannot measure, they cannot manage these spaces. So we'll
Speaker 4: see how the government or whatever kind of regulations that
Speaker 4: the states will try to come up with on this
Speaker 4: space will play out. Because for as long as they
Speaker 4: don't have visibility, how do they proceed? You will not
Speaker 4: see any crypto enthusias coming to volunteer right still waiting
Speaker 4: to see that happening.
Speaker 2: Here, And you can of course read our full coverage
Speaker 2: of Crypto across Bloomberg platforms. Here's a few other stories
Speaker 2: we're watching in the region.
Speaker 4: This week.
Speaker 2: Resolute Mining shares were temporarily suspended as Molly demanded the
Speaker 2: Australian gold miner pay about one hundred and sixty million
Speaker 2: dollars to resolve a tax dispute that seen its chief
Speaker 2: executive officer detained. Terry Holahan and two colleagues have been
Speaker 2: held in the capital of Bamaco since late last week
Speaker 2: after the Resolute boss traveled to the city for meetings
Speaker 2: with the nation's tax and mining authorities. The detention comes
Speaker 2: as the military rulers of Africa's third largest gold producer
Speaker 2: ratchet up pressure on mining companies to renegotiate contract terms,
Speaker 2: and South Africa started allowing some movement at its main
Speaker 2: border with Mozambique on Thursday morning after protests prompted a
Speaker 2: suspension the day before. Mozambique has been racked by the
Speaker 2: worst election unrest since the end of its sixteen year
Speaker 2: civil war in nineteen ninety two, after opposition leader Venancio
Speaker 2: Mondlane claimed victory in an October ninth election that official
Speaker 2: results showed the ruling party one by a landslide, and
Speaker 2: you can follow these stories across Bloomberg, including the Next
Speaker 2: African Newsletter. We'll put a link to that in the
Speaker 2: show notes. This program was produced by Adrian Bradley. Don't
Speaker 2: forget to follow and review the show wherever you usually
Speaker 2: get your podcasts. I'm Jennifer's Abasaga. Thanks as always for listening.