Recently, the Bank of Uganda has warned citizens against investing in cryptocurrencies, putting Onecoin and Bitcoin in the same trash buсket. What is behind the positions of governments of developing countries like Uganda and Nigeria?
Before Uganda, such warnings have come out of some other developing countries like Nigeria.
So today in Nigeria a lot of individuals now take extra care when making transactions in local banks for Bitcoin-related products or services.
Users most often clearly advise depositors not to include such in the description of the purpose of a transaction, so as to avoid having their bank accounts blocked or frozen.
A lot of individuals have fallen victim to cryptocurrency scams by investing in what they thought were real and genuine cryptocurrencies.
Many experts and economists consider OneCoin as the current number one scam coin in the world. It does not possess the fundamental characteristics of a genuine cryptocurrency, instead, its followers pursue the cause of OneCoin as a religion.
But why Bitcoin gets mixed up with that “currency” that is built similarly to other MLM pyramids?
Data Architect at Central Bank of Nigeria, Ayodeji Odusote thinks that there are technical differences in the warnings from Nigeria and Uganda. While Nigeria addressed specifically stakeholders in the regulated financial services sector, Ugandan authorities appealed to the wider public.
Odusote notes however that both governments did not make any distinction between genuine and scam cryptocurrencies for a simple reason that "from a currency perspective, the veracity of a cryptocurrency is irrelevant as it poses a direct threat to the authority of the regulator to control the money supply."
According to Odusote, for both governments, it is irrelevant whether the cryptocurrency is genuine or fake. Both do not serve their financial objectives.
“The perspective of these regulators, owing to their publications, is strictly monetary. It futile to say something is genuine, yet unacceptable and another is fake, which is also unacceptable. Both are not. So there is no need for distinction.”
But for regulators who have identified the opportunities offered by the technology embedded in cryptocurrencies, the Blockchain, such distinction might be important.
CEO of Hyperchain Technologies, Chigozie Ononiwu thinks that linking Bitcoin to Onecoin is wrong in any case. Ononiwu describes Onecoin as a mediocrity compared with Bitcoin.
While Ononiwu describes Bitcoin as “innovation”, he suspects policymakers of developing countries in corrupt practices regarding Bitcoin.
Ononiwu thinks some of these leaders may acquire Bitcoins for themselves while introducing measures to keep the people away from doing the same thing:
“They're busy stockpiling Bitcoin while scaring everyone off.”
To avoid problems, Ononiwu suggests that any cryptocurrency offering HYIP should be barred from transactions, and every company dealing in Bitcoin and Blockchain tech should be properly and transparently vetted.
“Government needs to encourage mass adoption by partnering with companies like ours. Our Virtual Bitcoin ATM is a clear example that Bitcoin can be purchased by all with ease.”