Despite a huge cryptocurrency market crash, Tim Draper believes the value of will keep going higher in the upcoming years. Speaking to Thiel Macro’s Mike Green earlier this month, the billionaire said he believes virtual currencies will eventually overtake fiat currency, making up two-thirds of the world’s currency value.
“Down the road, when we can easily spend, or invest, or do whatever we want with cryptocurrencies—they’re frictionless, they cost you less,” Draper told Green during the World Crypto Con in Las Vegas, as reported.
“I mean, just by that alone, just that they cost you less, it’s going to be better for people. And so they’re going to move to crypto, and they’re going to go away from the political currency—they call it fiat.”
bitcoin has below $4,000 last week, losing around 80% from its peak of $20,000 recorded in December, 2017. The cryptocurrency’s price dropped by around 40% in just two weeks this month, marking the biggest sell-off since April, 2013, when bitcoin lost about 44% of its value.
The overall crypto market, meanwhile, below $120 billion, losing $89 billion. At the time of writing, bitcoin stands at $3,801, while the market is valued at $124 billion, shows.
Transition to Cryptocurrency is About to Happen
Some countries, Draper argued, understand that the transition is imminent and are already trying to move to digital currencies.
“That’s the way it’s going to move. And so the countries that are forward thinking are saying, this is the way it’s going to be. So we’re going to make a huge mistake by trying to cling to our old currency. And that’s why you’re seeing the smaller countries all say, ‘yeah, we want bitcoin, we want initial coin offerings (ICOs) here, we want blockchain. We want all of these things in our country,” he added.
As far as bitcoin’s future, the investor the cryptocurrency will reach $250,000 by 2022. Besides, he is confident the ratio of virtual currency to fiat money will soon be 50-50, as it will become easier for people to invest bitcoins than dollars.
Comparing the cryptocurrency to dollars, Draper noted he would prefer to invest in the currency that is not controlled by any political force and is “frictionless and global.”
Draper Plans to Launch bitcoin Venture Fund
Draper also revealed during the interview that he’s considering to raise a bitcoin venture fund.
“Eventually, I want to be able to raise a fund that is all bitcoin, invest it all in bitcoin into a bunch of different companies, and have them pay their employees and suppliers all in bitcoin. And then no accounting fees, and it’s done automatically. And it’s all built into smart contracts so that if one of those companies gets sold, I push a button, it just shoots into all of their bitcoin wallets,” he said.
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A large commercial bank in Nigeria has threatened to shut down an undisclosed number of cryptocurrency-related accounts without explanation. Lagos-based Union Bank claims that any decision to do so would be in line with the Central Bank of Nigeria’s (CBN) past warnings about cryptocurrency trading.
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Panicky Customers Empty Account Balances
In a statement to account holders this week, Union Bank of Nigeria warned: “In order to guarantee the security of our customers’ funds, Union Bank will monitor accounts being used for cryptocurrency transactions and may impose restrictions including closure of such accounts.” The 100-year-old bank, which has $3.84 billion in assets, cited a series of cautionary statements from the CBN, which apparently do not completely prohibit virtual currency trading, to support its decision.
In January 2017, the central bank released a circular to financial institutions asking them not to use, hold or trade virtual currencies pending “substantive regulation and or (a) decision by the CBN.” A follow-up in February 2018 reiterated the same warning, but added “that virtual currencies are not legal tender in Nigeria … we wish to caution all and sundry on the risks inherent in such activities.”
However, Union Bank’s sudden decision to monitor accounts has shaken the west African country’s digital asset industry, the continent’s biggest. Reports have started to emerge of nervous crypto investors already withdrawing their money to avoid the possibility of their accounts being frozen.
Munachi Ogueke, co-founder of — a Lagos-based over-the-counter bitcoin trading platform — told news.bitcoin.com that several people within the Nigeria cryptocurrency space had received notifications of possible account closures from Union Bank. “Many are emptying their accounts and closing them down,” Ogueke said.
Anti-Money Laundering Regulations?
It is difficult to understand the motivation behind Union Bank’s unexpected assault on cryptocurrency-linked accounts. The matter is even more unclear in light of the CBN’s warnings, as neither of them explicitly said that cryptocurrency transactions were illegal. But Ogueke has suggested that commercial banks may have been given carte blanche by the CBN to close customer accounts without explanation, as long as their actions are in accordance with anti-money laundering rules.
Citing the January 2017 central bank circular, Ogueke explained:
Banks and other financial institutions that have cryptocurrency customers have the authority and can discontinue the relationship with such customers where the banks are not satisfied with the AML/CFT controls that enable compliance with the identification, verification, and transaction monitoring requirements.
Ogueke added: “In the absence of any regulation from the CBN, it can be safely concluded that the CBN by this circular, has given banks (such as Union Bank) the power to close accounts of cryptocurrency customers if the customer breaches anti-money laundering control requirements and where there are suspicious transactions.”
But Union Bank has said that its decision to monitor accounts does not mean that it necessarily suspects that some customers are violating anti-money laundering laws. Rather, it says it is becoming more vigilant to protect client funds, but Ogueke said he is doubtful, describing its justification as “flimsy.”
Munachi Ogueke
“How is blocking accounts associated with bitcoin securing the funds of your customers?” he quipped.
No other bank is known to have issued a similar threat. When news.bitcoin.com reached out to Union Bank for comment, it repeated the statement it had sent out to its customers.
What do you think of Union Bank’s decision? Let us know in the comments section below.
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