The Parliament of the Economic Community of West African States (ECOWAS) raises a warning against the use of cryptocurrencies to all african crypto users. The refusal is for the usage of crypto in means of exchange and commerce.
Moreover, the warning was issued after the joint committee meeting in Ouagadougou, Burkina Faso on July 10th, 2021. The African legislatures refuse to use these digital assets as they are more volatile and risky in the market. Further, the committee meeting summons the prospects of cryptocurrencies as a facilitator for investment to the crypto experts and the resource persons who were the participants of the meeting.
Additionally, the joint committee advised the sub-region to avoid crypto-related payments without breaking the legal laws. Hence, the Parliament has cautioned against the use of cryptocurrencies as a means of exchange and commerce. It also reminds the users that these digital assets cannot be like e-cash as they are highly volatile.
The Irregularity of Crypto
The joint committee shared an example of the irregularity of the cryptocurrency in the market. For instance, the price value of Bitcoin drops extremely low which is an evolving topic in the market today. Thereby, the African legislators state that cryptocurrencies are not safe and secure, hence their use on the African continent is dangerous for various reasons.
Another major issue for crypto volatility is that crypto transactions are irreversible. Only if the sender sends the asset across. The users can get back their asset only if the reciever agrees to send it back.
More so, the committee says,
“Among the risk factors identified is that cryptocurrency is insecure liquidity, given the shallow depth of the foreign exchange market and high concentration of assets. Thus a liquidity problem may arise.”
Therefore, with these many risky aspects in the cryptocurrencies, it cannot be entertained within the African region. Thus, the fluctuations of the assets may cause dangers to the users and to their valuable assets.
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