Economic Union of 15 West African States expresses concerns over crypto volatility

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A regional and economic union of 15 West African countries has expressed concerns over the use of cryptocurrencies in the region due to crypto volatility and other risks.

According to a report released Thursday by the Leadership newspaper, member countries said the decline of bitcoin in recent months was a reminder that cryptocurrencies are not safe havens.

The comments came during a parliamentary meeting of the Joint Committees of the Economic Community of West African States (ECOWAS) in Ouagadougou, Burkina Faso.

Several cryptocurrency experts and resource staff were also present at the meeting, according to the report.

The region has had a mixed experience with the nascent asset class. Sometimes crypto has helped unbanked people in the region, although earlier this year Nigeria’s central bank ordered institutions under its jurisdiction to block crypto-related accounts. He has since softened his stance.

ECOWAS has also stated that cryptocurrencies can be refused as payment without the necessary legal protections normally afforded to government-issued fiat.

Other risks include their volatile and speculative nature as well as susceptibility to theft.

The union also highlighted crypto’s precarious liquidity relative to the $ 6.6 trillion forex market and the fact that 96% of cryptocurrencies are only owned by 2.5% of users.

CoinDesk could not determine where ECOWAS got its numbers. Glassnode data shows that wallet addresses holding more than one bitcoin are down since the start of the year, while those holding less than one are on the rise.

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