- Bitcoin posts a slightly higher high today at USD 9,838
- LocalBitcoins trading volume unaffected by stricter verifications and AML compliance
- Bank of Ghana reaffirms commitment to a CBDC pilot
Bitcoin markets continued to show strong undercurrents globally, managing to even edge up slightly higher on the daily peak today at USD 9,838 (CoinDesk) while simultaneously posting a higher low at USD 9,682.
Our very own BitcoinNews.com radio show is back, by the way, and our own radio hosts talk about the Bitcoin doldrums, but we wonder if there could be just the calm before the storm that will hit once the rally gets underway!
If there is any kind of sentiment to look for, we turn towards one of the oldest peer-to-peer Bitcoin trading marketplaces, LocalBitcoins, the Finland-based exchange where people buy and sell Bitcoin to each other in almost every local currency there is throughout the world.
Especially since last year, there have been stricter and stricter measures placed on the site, limiting the anonymous means of selling and buying, and enforcing verification on account users as part of tighter Know Your Customer (KYC) and Anti Money Laundering (AML) compliance on part of the platform.
This initially led to commentators believing that many traders would stop using the platform, either because they were unable to complete verification or unwilling to do so to protect their privacy. However, judging from the volumes of trading that continue to take place over the platform, it would appear that these fears were unfounded as Localbitcoins continues to show that it is still the world’s most favorite P2P trading avenue.
Market data made available from crypto analysts Nomics shows that Localbitcoins has not been immune to dropping volumes during certain periods throughout the year, but actually correlate with the rise and fall of volume on major centralized exchanges such as Coinbase.
The data uses two examples of Coinbase and OKEx, who have shown a 45% and 30% drop in volume respectively over the past 12 months — but have both posted 800% and 2,500% respective growth since January 2020. LocalBitcoins did not suffer as badly over the last 12 months, losing only 27% of its volume, but also showed a more stable incline, growing 40% since January 2020.
A spokesperson of the world’s oldest P2P platform told CoinDesk that the removal of cash trades — an anonymous trading method — had not impacted volume as much as some might have thought, explaining:
“Cash trades used to be less than 0.5% of all the trades. Removing them didn’t have an impact on our trade volumes.”
Now eight years old, LocalBitcoins grew in popularity mainly because it was a relatively safe place to trade — with Bitcoin funds locked in escrow and an arbitration system that helped resolve disputes quickly. Cash trades were also available, although the security and convenience of online trades have always been much more popular. Today, it continues to operate successfully, in compliance with the European region’s 5th Anti Money Laundering Directive which came into force late last year.
It would appear that most Bitcoin users and traders aren’t afraid of verifying themselves on a trusted platform after all.
Meanwhile, the interest and sentiment in the African continent has not abated even with crypto markets without a clear direction. Ghana’s central bank, for example, has reiterated its commitment to being one of the pioneers of a central bank digital currency (CBDC).
Bank of Ghana’s first deputy governor, Dr Maxwell Opoku-Afari, was speaking at a virtual stakeholder workshop on payment systems and services, and was quoted by digital media portal GhanaWeb to say:
“[the bank has]… demonstrated leadership and foresight in creating the enabling environment for competitive, innovative and inclusive development of the financial sector… We will continue working with you to ensure that you are taken through the licencing process to enable you deliver value to consumers and the broader the financial sector.”
Dr Opoku-Afari was mainly referring to the establishment of a Fintech and Innovation Office by the bank to foster development in the national sector, adapting its organizational structure over the years to shift to a major change in the payments sector. Its entire concept has been changed to encourage electronic cash transactions, so the bank’s CBDC pilot plans remain unchanged, if not stronger.
Under the central bank’s Payment Systems Department, the state has already helped grow a range of digital interbank payments systems in Ghana, authorizing the Ghana Commercial Bank to issue e-money. Less than a year ago, the Bank of Ghana first made public its intentions for a CBDC, with its governor Ernest Addison saying that trials would be started in a regulatory sandbox with a view to possibly issue an electronic cedi in the near future.
Extremely encouraging news for those in Africa’s fintech sector. Could Ghana be the first to pop up with a CBDC? We’re betting on the central bank to be motivated to do so!
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