Business

Crypto assets may displace local currencies in developing countries — IMF

Published

3 years ago

December 10, 2021

The International Monetary Fund has said some emerging markets and developing economies face immediate and serious risks of currency substitution by crypto assets.

The IMF disclosed this in a report titled, ‘Global Crypto Regulation Should be Comprehensive, Consistent, and Coordinated’ released on Thursday.

In the report, the IMF said its mandate is to safeguard the stability of the international monetary and financial system.

The Washington DC-based fund said, “Some emerging markets and developing economies face more immediate and acute risks of currency substitution through crypto assets, the so-called cryptoisation.

“Capital flow management measures will need to be fine-tuned in the face of cryptoisation. This is because applying established regulatory tools to manage capital flows may be more challenging when value is transmitted through new instruments, new channels and new service providers that are not regulated entities.”

READ ALSO:

According to the IMF, crypto assets will soon pose systemic financial stability in some countries as policy makers struggle to the monitor risks.

It added that crypto assets were drastically changing the financial system it was trying to protect.

The IMF said, “Crypto assets and associated products and services have grown rapidly in recent years. Furthermore, inter linkages with the regulated financial system are rising.

“Policymakers struggle to monitor risks from this evolving sector, in which many activities are unregulated. In fact, we think these financial stability risks could soon become systemic in some countries.”

“While the nearly $2.5tn market capitalisation indicates significant economic value of the underlying technological innovations such as the blockchain, it might also reflect froth in an environment of stretched valuations.”

According to the international fund body, identifying, monitoring, and management of crypto-related risks continues to defy regulators and firms.

It added that in developing economies for instance, cryptoisation was threatening to replace domestic currency, and circumvent exchange restrictions and capital account management measures.

The IMF said, “Such risks underscore why we now need comprehensive international standards that more fully address risks to the financial system from crypto assets, their associated ecosystem, and their related transactions, while allowing for an enabling environment for useful crypto asset products and applications.”

The IMF added that crypto’s cross-sector and cross-border remit limits the effectiveness of national approaches. The body said, “Countries are taking very different strategies, and existing laws and regulations may not allow for national approaches that comprehensively cover all elements of these assets.

READ ALSO:

“Importantly, many crypto service providers operate across borders, making the task for supervision and enforcement more difficult. Uncoordinated regulatory measures may facilitate potentially destabilising capital flows.”

According to the IMF, there is a need for a global regulatory framework that provides a level playing ground along the activity and risk spectrum.

It said crypto-asset service providers that deliver critical functions should be licensed or authorised.

The IMF said, “These would include storage, transfer, settlement, and custody of reserves and assets, among others, similar to existing rules for financial service providers.

“Licensing and authorisation criteria should be clearly articulated, the responsible authorities clearly designated, and coordination mechanisms among them well defined. Requirements should be tailored to the main use cases of crypto assets and stablecoins.”

The IMF added there was an urgent need for cross-border collaboration and cooperation to address technological, legal, regulatory, and supervisory challenges.

“Crypto assets are potentially changing the international monetary and financial system in profound ways,” it added.

Punch

Related Topics:Countries Crypto developing Featured IMF local currencies

Up Next

UAE writes Hadi Sirika, seeks review of Emirates flight frequency

Don't Miss

Airlines to pay $3,500 per passenger for flouting COVID-19 protocols – NCAA

Aviation

Disaster averted as bird strike hits Abuja-Lagos Air Peace flight

Published

9 hours ago

November 14, 2024

Trends Admin

Disaster averted as bird strike hits Abuja-Lagos Air Peace flight

An Abuja-Lagos flight was on Thursday aborted following a bird strike on the airplane belonging to Air Peace, forcing the authorities to ground the aircraft.

The bird strike experienced in the early hours reportedly prompted a ramp return to ensure the safety of passengers onboard.

All the passengers quickly disembarked and were calmed down before they were moved into another plane for the one-hour journey.

A bird strike is a collision between a bird and an aircraft, or other airborne animal, while the aircraft is in flight, taking off, or landing. And it can be a significant threat to aircraft safety.

Air Peace in a statement by its Head of Corporate Communications, Ejike Ndiulo, said the bird strike occurred at 6:30am, and all passengers disembarked normally.

The statement read, “We wish to inform our esteemed passengers that our Abuja- Lagos 06:30 flight experienced a bird strike before take-off, prompting a ramp return as a safety measure. All passengers disembarked normally.

“We have deployed a replacement aircraft for the affected flight in order to minimize disruptions, thus ensuring that passengers continue their journeys promptly.

“We appeal for the understanding of our valued passengers impacted by this development, as well as those on other flights that may experience delays.

“At Air Peace, we are committed to providing safe, comfortable, and reliable air travel for all our passengers.”

Business

NNPC achieves 1.8mbpd crude oil production

Published

10 hours ago

November 14, 2024

Trends Admin

NNPC achieves 1.8mbpd crude oil production

The Nigerian National Petroleum Company Limited (NNPC Ltd) and its partners have revved up crude oil and gas production to 1.8million barrels per day (mbpd) and 7.4standard cubic feet per day (scfd).

The company which announced this at a press briefing said the feat was achieved in compliance with the mandate of President Bola Ahmed Tinubu.

Speaking on the development, the Group Chief Executive Officer, Mr. Mele Kyari, congratulated the Production War Room Team that anchored the production recovery process.

“The team has done a great job in driving this project of not just production recovery but also escalating production to expected levels that are in the short and long terms acceptable to our shareholders based on the mandates that we
have from the President, the Honourable Minister, and the Board,” Kyari explained.

Giving details of the efforts of the Production War Room, the Chief War Room Coordinator and Senior Business Adviser to the Group Chief Executive Officer, Mr. Lawal Musa, disclosed that the feat was achieved through the collaborative efforts of Joint Venture and Production Sharing Contract partners, the Office of the National Security Adviser, as well as government and private security agencies.

READ ALSO:

He said the interventions that led to the recovery of production cut across every segment of the production chain with security agencies closely monitoring the pipelines.
He stressed that when the Production War Room team was inaugurated on 25th June 2024, production was at 1.430mbpd, but the team swung into action, culminating into sustaining the production recovery to 1.7mbpd in August and hitting the current 1.808mbpd in November.
“We are confident that with this same momentum and with the active collaboration of all stakeholders, especially on the security front, we can see the possibility of getting to 2mbpd by the end of the year,” he stated.
Also speaking on the development, Chairman of the NNPC Ltd Board of Directors, Chief Pius Akinyelure, who also congratulated the team, said he was happy to be part of the production recovery process, adding: “today, I will leave this place with my heart full of joy”.

He charged the Company’s Management to come up with a cashflow projection based on the new production figures to facilitate planning, stressing that he was looking forward to further production increase to 3mbpd.

On his part, the Honourable Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, expressed satisfaction with the performance of the team and pledged the Federal Government’s support for the company to do more.

NNPC achieves 1.8mbpd crude oil production

Business

FG gets fresh $134m loan from AfDB for agric projects

Published

10 hours ago

November 14, 2024

Trends Admin

FG gets fresh $134m loan from AfDB for agric projects

The Federal Government has secured a loan facility of $134million from the African Development Bank (AfDB) to help farmers boost seeds and grain production in the country.

This is contained in a statement issued by Anthonia Eremah, Chief Information Officer, Ministry of Agriculture and Food Security, on Thursday, in Abuja.

Minister of Agriculture and Food Security, Sen. Abubakar Kyari, made his know at the unveiling of the 2024/2025 National Dry Season Farming in Calabar, Cross River State capital.

Kyari explained that with the re-introduction of the national dry season farming to boost year-round agricultural production, the loan would be handy and guarantee national food security in the country.

The minister said the initiative is under the National Agricultural Growth Support Scheme-Agro Pocket (NAGS-AP) Project.

He said the federal government had declared an emergency on food production to enable all Nigerians to get easy access to quality and nutritional food at affordable rates.

Kyari also said government wants to use the agricultural sector for national economic revival through increase in production of some staple food crops such as wheat, rice, maize, sorghum, soybean, and cassava during both dry and wet season farming.

He added that 107,429 wheat farmers were supported under phase 1 of the 2023/2024 dry season, and 43,997 rice farmers under the second phase of the 2023/2024 dry season.

READ ALSO:

The minister said recently, government supported 192,095 rice, maize, sorghum/millet, soyabean and cassava farmers under the 2024 wet season across the 37 States including the FCT.

He said Cross River was leading 16 other states in wheat production, adding that over 3000 wheat farmers have been listed to benefit from the support to grow the grain.

Kyari noted the Cross River government’s commitment to wheat production.

He said it informed why the federal government is partnering with the state to kick start the maiden wheat production and enlisting them among states commencing the current 2024/2025 dry season farming.

“The 2024/2025 dry season farming, the project is targeted to support 250,000 wheat farmers across the wheat-producing states with subsidised agricultural inputs.

“This is to cultivate about 250,000 hectares with an expected output of about 750,000 metric tonnes of wheat to be added to the food reserve to reduce dependence on importation of the product and also increase domestic consumption.

“Equally the programme will provide support to 150,000 rice farmers under the second phase to cover all the 37 states, including FCT, with an expected output of about 450,000 metric tonnes,” he said.