The Economic Community of West African States (ECOWAS) has expressed concerns about the use of cryptocurrencies due to the associated risks. This, according to Leadership Newspaper.
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The issue was discussed at a meeting of ECOWAS’s joint committees. Also in attendance were consultants and experts on cryptocurrencies.
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Members noted the prospects of digital assets as intermediaries for investment in West Africa, but pointed to the \”sharp decline\” in Bitcoin’s price. In their view, this situation serves as a reminder that cryptocurrencies \”are not safe assets.\”
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They listed irreversibility of transactions, restricted supply, volatility and fraud among the risks. Cryptocurrencies cannot be used as a payment method without the necessary legal framework, the members of the community added.
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ECOWAS was founded in 1975. It comprises 15 member states, including Ghana, Cabo Verde, Mali, Nigeria, Senegal and Togo.
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In 2019, Jack Dorsey visited the continent and suggested that the future of the first cryptocurrency largely depends on African countries.
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Subsequently, Arcane Research analysts named the region the most promising for the development of digital assets.
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In 2020, the Nigerian Securities and Exchange Commission classified crypto assets as securities. Around the same time, experts recorded in African countries a rise in demand for digital gold on P2P platforms.
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In February 2021, the Central Bank of Nigeria forbade financial institutions from providing services to cryptocurrency exchanges and companies dealing with digital assets.
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Subsequently, the Nigerian Senate proposed that the central bank regulate the sector rather than restrict it.
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In April, it emerged that the volume of P2P operations in the country increased by 27%. Analysts at UsefulTulips noted similar growth in Ghana and Kenya.
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