The recently held Blockchain Vibes at Marina, Lagos Nigeria on the 9th of July, 2022 had several personalities across Africa, and Asia in attendance speaking on various topics.
Amongst the several points of discussion was the role exchanges play in influencing the adoption and growth of the crypto industry. The Blockchain space is rapidly expanding with new innovations coming to the market. Will innovation thrive without proper regulations?
In a panel discussion, with Owenize Odia of Luno, Aronu Ugochukwu of Xend Finance, Tola Joseph Fadugbagbe of CryptoMasterClass, Obinna Iwuno of SiBAN, and representative from Patricia were all present.
Mr Frank moderated the discussion, which focused on a deep dive into how exchanges play a vital role in blockchain adoption.
Centralized exchanges use KYC, to validate the identity of customers; however, KYC does not seem to conform to the features of decentralization fully.
To clarify the reason for the deviation, a Representative from Patricia mentioned that exchanges do not warehouse KYCs; they are merely outsourced to third-party management to improve transparency and prevent theft.
Centralized exchanges do not offer seed phrases to users; instead, they retain them and provide a password reset option for users who lose their passwords, which is not available in decentralized exchanges. Depending on the verification level, exchanges that employ KYC are paired with a KYC provider.
To support this claim, Owenize Odia stated that, “It is important that you know your customers.” The cryptocurrency industry is innovative and rewarding, but many people join it because of the economic situation, to make their money work for them, to be proud that they own crypto, to hold for value appreciation, and to diversify their portfolio.
Can exchanges use Blockchain education to increase adoption?
In response to this subject, Owenize stated that one of Luno’s primary missions is to see individuals enter the blockchain space from an informed perspective. However, exchanges generally have only scratched the surface of blockchain education.
The CEO of Xend Finance said exchanges withholding their customers’ assets in a bear market violates the fundamental concept of decentralization. The Xend finance CEO, Ugochukwu Aronu went on to explain that during the bear market, the crypto natives should look at decentralized finance rather than centralized finance.
The DeFi ecosystem has been created to be open and transparent. Anyone on the web can view the cash flow. Still, in centralized exchanges where assets are managed, backend managers might become sentimental in decisions that may cause the network to decline.
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On government regulation in blockchain, Tola Fadugbagbe maintains that “regulation will continue in the crypto industry whether we like it or not.” It certainly has its issues, but it primarily ensures the security of funds. Owenize agreed, stating that “regulation will help drag bad players who are in the industry.”
Payment systems and methods are rapidly evolving, but what does the future of payment in Africa hold?
In response to that question, Obinna Iwuno, the Executive Secretary of SiBAN, provided a direct and succinct comment, stating that the future of payment is ‘mobile.’ Being mobile means having blockchain payment systems that function in the mobile phones of average business people and can be accessed even when not connected to the internet.
He concluded by confirming Nigeria’s position as the leading nation in bank money transfer services. According to TBS SiBAN’s Secretary, if blockchain technology is correctly implemented in our society, it has the potential to compensate for traditional banking’s shortcomings.
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