Connect with us

Economy

Britcoin: Is the UK Economy Getting Closer to Launching Its Digital Currency?

Published

on

Britcoin

Under plans being drawn up by the Bank of England and the Treasury in the UK, consumers could be using a new digital pound, widely dubbed as Britcoin, by the end of the decade. Rather than replacing cash and bank deposits, Britcoin would exist alongside them.

This digital currency would not be a cryptocurrency or a crypto asset like those seen within the private sector, as it would be issued by a central bank. It would instead be a Central Bank Digital Currency (CBDC), denominated in pounds, where £10 of Britcoin would always hold the same value as a £10 note. The hope is that the Bank’s Britcoin would be more stable than Bitcoin, which is famed for being incredibly volatile.

As of early February of this year, the UK government is speeding up its response to the rise of privately issued cryptocurrencies and stable coins, beginning a four-month public consultation process on Britcoin. Members of the public are being invited to give their views on the digital pound as part of the research and development being carried out. The Bank and the Treasury hope to reassure the public that a state-backed digital currency will be as safe as cash, particularly after 2022 saw the collapse of crypto exchange FTX, and the massive comedown of the crypto market that then followed.

It is easy to see why the case for the UK having a digital pound in the future continues to grow, especially as the world around us is becoming more and more digitalised. You just need to go online and you can see an abundance of businesses and customers alike taking advantage of the digitalised culture.

Crypto casinos, for example, are becoming increasingly popular in the online casino world. Here, customers can use digital currency to play casino games like roulette, blackjack and, according to this article, the fan favourite slots. And it isn’t just businesses. The education sector is also jumping on the digital bandwagon, with classroom teaching adopting more and more digital tools and methods to benefit both the teachers and the pupils. Digital transformation is rife across the board, and the UK economy is not wanting to be left behind.

While the government might still decide against going ahead with Britcoin, momentum is definitely building to back the idea, with many arguing that a digital pound will be needed at some point in the future. The hope is that it would provide a new way to pay, help both businesses and the public, and better protect financial stability.

If it was introduced, it would be interchangeable with cash and bank deposits, and would be able to be used to make payments both in person and online. According to the Treasury, however, there would be a limit on the amount of Britcoin people could hold during the introductory phase, in a hope to strike a balance between encouraging use and managing the risks – one of these risks being the potential for large and rapid outflows from banking deposits into Britcoin.

During the latest consultation, officials will explore the technical issues involved with creating this CBDC before making a final decision, which should be due in 2025. If the go-ahead does happen, the Bank and Treasury hope that we could see Britcoin held in digital wallets by the end of the decade.

While there are many arguments for the case of Britcoin, there are a number of implications that the technical team will need to carefully consider. Changing the way a country uses money is a rather profound and colossal decision, and the digital pound would be subject to rigorous standards of privacy and data protection, with a decision largely based on future developments in money and payments.

The UK isn’t the only country looking into using its own official digital currency, the US Federal Reserve and the European Central Bank are also considering it. The UK plans are, however, at a more advanced stage, and the next couple of years will be really telling about whether the UK does see the plan through. And if they do, whether other countries will follow suit.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

Economy

Unlisted Securities Market Closes Flat at Midweek

Published

on

Unlisted Securities Market

By Adedapo Adesanya

Trading activities ended in a stalemate on the floor of the NASD Over-the-Counter (OTC) Securities Exchange on Wednesday, with no single price gainer or a price loser at the close of business.

As a result of this development, the market capitalisation of the bourse remained intact at N1.03 trillion, as the NASD Unlisted Securities Index (NSI) also remained unchanged at 743.15 points.

The unlisted securities market closed flat in the midweek session amid low investor appetite for the market, as attention shifted to the fixed-income market, where the Central Bank of Nigeria (CBN) sold treasury bills at the primary market, with the stop rate over 14 per cent.

Data from the bourse showed that the volume of securities traded yesterday was abysmally low as it went down by 99.9 per cent to 8,299 units from the 20.1 million units transacted a day earlier.

Likewise, the value of shares traded during the session dropped to N1.2 million, 97.3 per cent lower than the N44.5 million posted in the preceding trading day.

These transactions were carried out yesterday in nine deals, 75 per cent lower than the 36 deals executed on Tuesday.

Geo-Fluids Plc remained the most traded stock by volume on a year-to-date basis with a turnover of 482.1 million units valued at N544.1 million, UBN Property Plc occupied second place with the sale of 365.8 units worth N309.5 million, while Industrial and General Insurance (IGI) Plc was in third place with the sale of 71.1 million units valued at N5.1 million.

Also, VFD Group Plc ended the session as the most traded stock by value on a year-to-date basis with a turnover of 7.3 million units worth N1.7 billion, Geo-Fluids Plc was in second place with a turnover of 482.1 million units worth N544.1 million, while UBN Property Plc was in third place with the sale of 365.8 million units valued at N309.5 million.

Continue Reading

Economy

Naira Sells N461.24/$1 at I&E, N764/$1 at P2P, N747/$1 at Black Market

Published

on

Fake Naira notes banknotes

By Adedapo Adesanya

The Nigerian Naira appreciated against the US Dollar in the Peer-2-Peer (P2P) and the Investors and Exporters (I&E) windows of the foreign exchange market on Wednesday, March 30, but depreciated in the black market.

In the P2P segment, it gained N3 against its American counterpart to quote at N764/$1, in contrast to the N767/$1 it was traded on Tuesday as the demand for cryptos, which most traders in this category use the funds to buy, was relatively mild.

In the I&E window or the spot market, the Naira appreciated against the greenback yesterday by 51 Kobo or 0.11 per cent to settle at N461.24/$1 compared with the previous day’s N461.75/$1, according to data obtained from FMDQ Securities Exchange, with the forex turnover put at $74.31 million.

But in the parallel market, the domestic currency depreciated against the US Dollar in the midweek session by N4 to trade at N747/$1 versus Tuesday’s exchange rate of N743/$1.

Also, in the interbank window, the Naira lost N1.93 against the Pound Sterling to sell at N567.68/£1 versus Tuesday’s N565.52/£1, and against the Euro, it slid by N2.25 to at N499.21/€1 compared with the preceding day’s N496.66/€1.

Meanwhile, the digital currency market swayed to the bulls yesterday as most of the tokens tracked by Business Post ended in the green territory amid better-than-expected consumer confidence figures from the United States.

Data from the US Conference Board showed that its monthly survey rose to a reading of 104.2 basis points, better than the 101 mark expected, lifting Bitcoin (BTC) by 4.2 per cent to $28,519.76, as Ethereum (ETH) rose by 0.5 per cent to $1,788.52.

Solana (SOL) grew by 2.1 per cent to $21.08, Dogecoin (DOGE) gained 1.4 per cent to sell at $0.0751, Litecoin (LTC) increased by 0.6 per cent to $90.14, while Cardano (ADA) chalked up 0.5 per cent to quote at $0.3797.

However, Ripple (XRP) dropped 0.4 per cent to trade at $0.5336, Binance Coin (BNB) lost 0.2 per cent to settle at $313.02, and Binance USD (BUSD) and the US Dollar Tether (USDT) traded flat at $1.00 apiece.

Continue Reading

Economy

Oil Drops on Profit Taking Despite Supply Tightness

Published

on

crude oil sales

By Adedapo Adesanya

Oil edged lower on Wednesday as investors took profits from two straight days of gains amid supply tightness, causing Brent crude to lose 37 cents or 0.5 per cent to trade at $78.28 a barrel, and the US West Texas Intermediate crude to shed 23 cents or 0.3 per cent to sell at $72.97 per barrel.

On the supply side, worries of tightness after an unexpected draw in US oil stockpiles and a halt to some Iraqi Kurdistan oil exports were partially offset by a smaller-than-expected output cut in Russia.

About 450,000 barrels per day of crude export were halted on Saturday from Iraq’s semi-autonomous northern Kurdistan region following an arbitration decision.

The shutdown followed an International Chamber of Commerce court ruling in favour of Iran in a case against Turkey that claimed that the latter should not have allowed for the flow of oil from Kurdistan to Ceyhan without the express approval of the Iraqi government.

Initially, Turkey said it would abide by the court’s decision, but this week, the Turkish Ministry of Energy and Natural Resources said in a statement that the court had in fact ruled that Iraq should compensate Turkey for violating an oil export deal the two countries had.

Also, it was reported that Russian oil production fell by around 300,000 barrels per day in the first three weeks of March, less than the targeted cuts of 500,000 barrels per day.

US crude oil stockpiles fell unexpectedly last week, the Energy Information Administration (EIA) said, as refineries ramped up operations after maintenance season and US imports fell to a two-year low.

The EIA reported a crude oil inventory draw of 7.5 million barrels for the week to March 21 compared with a relatively modest inventory build of 1.1 million barrels for the previous week.

At 473.7 million barrels, the EIA said, crude oil inventories are 6 per cent above the five-year average for this time of the year.

In fuels, meanwhile, the authority estimated a mixed inventory picture after last week’s major draws in both gasoline and middle distillates pushed oil prices higher.

Analysts also said that concerns over banking issues have subsided for now in temporarily relieving expectations for a recession.

Pressure came as the US Dollar edged higher against most major peers, pausing its recent declines. A stronger greenback hurts oil demand as crude becomes more expensive for buyers who hold foreign currencies.

Continue Reading
%d bloggers like this: