Central Bank Of Sudan Urges Citizens To Steer Clear Of Cryptocurrencies Despite Economic Downturn
- Sudan warns citizens against turning to crypto in times of economic difficulty.
- Pundits fear an outright ban may be in play.
- More and more people are turning to Bitcoin as an inflationary hedge.
Sudanese state-controlled media reported a warning from the Central Bank Of Sudan (CBOS), advising citizens not to indulge in cryptocurrencies. The warning comes when the Sudanese economy appears to be falling apart.
A Looming Ban?
On Sunday, CBOS warned citizens not to participate in the developing crypto market, citing price volatility and fraud concerns. Additionally, the CBOS, as per the report from Sudan News Agency, reminded the people of Sudan that the country’s laws did not recognize cryptocurrencies.
According to statistics, the inflation rate in Sudan is second only to Venezuela. At the start of the year, the figure was pegged at 340%, a staggering figure considering that many experts believed the optimal rate should be around 2%.
The country’s currency continues to be devalued by the CBOS as the demand for the dollar increases. Presently, a google search will reveal that a dollar is worth around 447 Sudanese pounds, which, mind you, is higher than the current minimum wage, which sits at 425 Sudanese Pounds or $0.95 in a country where a loaf of bread costs $0.7.
Given such dire straits and continued currency devaluation, it should come as no surprise that the people of Sudan would search for an alternative means of preserving their wealth. Cryptocurrencies, be it stablecoins like USDT and assets like Bitcoin, the latter, touted by Michael Saylor as better than gold, could present an easy way for them to protect their wealth given the lack of intermediaries. However, if anything is to be taken from the warning from CBOS, this is an option they would prefer the people of Sudan not to consider.
Head of Strategy at the Human Rights Foundation Alex Gladstein, in a tweet yesterday, said it was a response to the “increased adoption [of crypto] in the country,” adding that he fears “a formal ban [of crypto in Sudan] is in the works.” Gladstein was not alone in his concern as Head of Digital Strategy for the Canadian Parliament; Tristan Lamonica also tweeted, “The people who need it [crypto] the most – are having the most onboarding friction. Quite sad really.”
Global Inflation And The Crypto Markets
Inflation has become a cause for concern among global economies as nations are still working to figure out how to tackle the COVID 19 pandemic and sustain the economy. Early efforts saw many governments up their fiat supply to support various stimulus packages to help families and businesses.
However, the consequence of that has been rising inflation. As a result, crypto, especially Bitcoin, has received more global interest from retail investors and institutional investors alike because the scarce nature of the asset and the fixed nature of its supply has allowed pundits to make a case for it as a store of value that can rival gold and real estate markets.
Notably, in the face of rising inflation and currency devaluation, Turkey also saw a spike in crypto trading activity. It wouldn’t be surprising if the same would be the case in Sudan.
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