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The pseudonymous creator of the popular stock-to-flow (S2F) bitcoin price model, Plan B, has published his “worst case scenario for 2021” predictions on social media on Sunday. The analyst says there’s also a “more fundamental reason” to why bitcoin prices have been dropping in June and how the month of July may see “weakness” as well.
Best Case Scenario: $450K Worst Case Scenario: $135K
Five months ago, bitcoin (BTC) prices went parabolic and the value of the leading crypto asset seemingly was following the well known stock-to-flow (S2F) model. At the time, the S2F creator said: “bitcoin stock-to-flow model [is] on track… like clockwork.” The price of bitcoin skyrocketed over $64K per unit but has since lost more than half that value.
At the end of April, Plan B remarked that the downturn was a “mid-way dip” and stressed that “nothing goes up in a straight line.” This past Saturday, Plan B further discussed the infamous death cross pattern in the BTC/USD chart and remained optimistic.
Then on Sunday, Plan B gave an update on his “worst case scenario for 2021.”
“Bitcoin is below $34K, triggered by Elon Musk’s energy FUD and China’s mining crack down,” Plan B tweeted. “There is also a more fundamental reason that we see weakness in June, and possibly July. My worst case scenario for 2021 (price/on-chain based): Aug>47K, Sep>43K, Oct>63K, Nov>98K, Dec>135K,” the analyst added.
Of course, Plan B made sure that people read his tweet carefully when people asked if they should disregard his model. “Please read my tweet more carefully,” Plan B replied. “I said this is a worst case scenario, not a base case, let alone best case. I am still on S2FX track for my base case. I have explained my personal (non)selling strategy in several interviews,” he added. Furthermore, someone asked Plan B: “What’s the more fundamental reason?”
“Great question. I [intend] to publish later this year,” the analyst replied. Additionally, the popular bitcoiner dubbed “Parabolic Trav” said that he likes a bearish Plan B tweet and said “Bullish.” Plan B also responded to Parabolic Trav’s statement and said:
Wait until you [see] my base case and best case scenarios! OK, a hint: best case Dec $450K.
Plan B: ‘Bitcoin Distribution Looks a Lot Healthier Now’
Plan B is a popular analyst and has more than 570,000 Twitter followers. The stock-to-flow price model has also grown in popularity during the last 12 months and it is referenced often in technical analysis. Plan B has been getting a lot more criticism in recent times since bitcoin’s price has been dropping lower. The sell-off, Plan B said this weekend, has led to better bitcoin distribution.
“60% of bitcoins sold in May-June were bought in March-April and sold at a loss,” Plan B wrote. “40% was bought earlier and sold at a profit. Of total 18.7M bitcoins ~2,5M bitcoins are bought at
What do you think about Plan B’s worst case scenarios for 2021? Let us know what you think about this subject in the comments section below.
Russian billionaire Oleg Deripaska wants the Bank of Russia, the country’s central bank, to embrace cryptocurrency, citing El Salvador’s bitcoin law as an example. El Salvador recently passed a bill making bitcoin legal tender in the country.
- Billionaire Oleg Deripaska is the founder of Basic Element, a Russian industrial group focusing in areas such as aluminum, energy, construction, and agriculture. In 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control imposed sanctions against Deripaska and some of his companies. According to Forbes, his net worth is currently $4.7 billion.
- Deripaska commented about bitcoin and criticized the central bank’s cryptocurrency policy in his Telegram channel last week. He said that even a poor country like El Salvador “realized the need for digital currencies and took a simple path – recognized bitcoin as a means of payment.”
- According to the World Bank, “El Salvador suffers from persistent low levels of growth and poverty reduction in the country has been moderate.” Humanium estimated that four out of 10 people of El Salvador live in poverty.
- El Salvador passed a bill to make bitcoin legal tender on June 9. The country is now focusing on bitcoin mining using energy from volcanoes.
- Deripaska questioned when developments in financial technologies (fintech) will “pierce a hole in this wall of superstition” of the Bank of Russia. He also questioned when Russian citizens will “receive a real financial instrument that ensures independence in foreign trade settlements,” instead of just “formal replies and press releases about the ‘development of the digital ruble.'”
- Last month, Bitcoin.com News reported that the Bank of Russia is preparing to launch a prototype of the digital ruble by the end of the year. The Russian central bank digital currency (CBDC) will be designed as a unique digital code stored in dedicated electronic wallets and will become a full-fledged means of payment that Russians can use alongside the regular ruble.
- Meanwhile, Russia’s Minister of Foreign Affairs, Sergey Lavrov, said last week that “the time will inevitably come when cryptocurrencies will play a very significant role, occupy a very significant segment in international settlements.”
Do you think the Bank of Russia should follow El Salvador’s example and embrace bitcoin? Let us know in the comments section below.
Billionaire investor and CEO of Point 72 Asset Management, Steve Cohen, says he is taking a deep dive into cryptocurrency. Emphasizing that he is “fully converted,” the billionaire said, “I’m not going to miss this. I already feel like I missed the first part of it.”
Steve Cohen Gets Into Crypto, Says He Is ‘Fully Converted’
Steve Cohen is the chairman, CEO, and president of Point72, an asset management firm with approximately $22.1 billion in assets under management (AUM) as of April 1. The firm has 12 offices around the globe and more than 1,650 employees.
He shared his view on cryptocurrency in an interview last week, emphasizing that he has finally decided that he has got to get into the game. The billionaire CEO said:
I’m doing a deep dive into crypto. I’m fully converted.
Cohen added: “I have an old saying at the poker table, you got to pay to learn. There’s no way around it. You can talk all you want, but you’ve got to get in the game.”
He continued, “I’m hopeful that we will be able to start building something within Point72,” adding that “we are in the process of starting to think about that.” Regarding when to get into the crypto market, Cohen opined:
The timing is never good. Who knows. I don’t know if these things are going to go up.
However, the Point72 CEO is not keen on bitcoin. “Forget bitcoin,” he exclaimed. “I don’t care about bitcoin. I care more about the technology behind the blockchain and how transformational it is and how disruptive it could be.”
Cohen further shared, “I feel like the way those markets are developing could be a real interesting adjacency to what we do at Point72,” stressing:
So, I’m not missing this. I’m not going to miss this. I already feel like I missed the first part of it, but I still feel like it’s early.
The billionaire noted that cryptocurrency is an example of something he wants to “look forward and take some risk.” He concluded: “I may look foolish initially, but you size it accordingly, learn the game, and when you’re confident, then take it to the next level.”
What do you think about Steve Cohen’s comments on crypto and bitcoin? Let us know in the comments section below.
Hedge fund manager Michael Burry, famed for forecasting the 2008 financial crisis, has warned of “the mother of all crashes.” He further explained that the problem with cryptocurrency is the leverage.
Michael Burry Warns of Mother of All Crashes
Famous investor and founder of private investment firm Scion Asset Management, Michael Burry, shared his view last week about where he sees the markets heading.
Burry is best known for being the first investor to foresee and profit from the U.S. subprime mortgage crisis that occurred between 2007 and 2010. He is profiled in “The Big Short,” a book by Michael Lewis about the mortgage crisis, which was made into a movie starring Christian Bale.
The Scion Asset Management founder tweeted Thursday:
All hype/speculation is doing is drawing in retail before the mother of all crashes. #FOMO Parabolas don’t resolve sideways; When crypto falls from trillions, or meme stocks fall from tens of billions, Main Street losses will approach the size of countries. History ain’t changed.
He also commented on cryptocurrency, asserting that “The problem with crypto, as in most things, is the leverage.” The famed investor further opined, “If you don’t know how much leverage is in crypto, you don’t know anything about crypto, no matter how much else you think you know.”
Burry previously said that he does not hate bitcoin but is concerned about the government coming down heavily on cryptocurrency. He warned in February that “In an inflationary crisis, governments will move to squash competitors in the currency arena.”
While emphasizing, “I don’t hate BTC,” Burry said that in his view, “the long term future is tenuous for decentralized crypto in a world of legally violent, heartless centralized governments with lifeblood interests in monopolies on currencies.” Nonetheless, he said he is not short BTC because “In the short run anything is possible.”
Burry is not the only one foreseeing a crash. Last week, Rich Dad Poor Dad author Robert Kiyosaki warned that the “Biggest bubble in world history getting bigger,” warning that the “Biggest crash in world history” is coming. The famed author expects the price of bitcoin to fall to the $24K level where he will buy some more BTC.
What do you think about Michael Burry’s prediction and his view on cryptocurrency? Let us know in the comments section below.
A pro-bitcoin congressman in Paraguay says he will present bitcoin legislation in congress next month with the aim to make Paraguay a hub for cryptocurrency investors worldwide. His efforts follow El Salvador passing a bill making bitcoin legal tender.
Paraguay Wants to Be Global Hub for Crypto Investors
Following El Salvador passing a bill making bitcoin legal tender, a congressman in Paraguay announced that he is working on bitcoin legislation that will be presented next month.
Deputy Carlos Antonio Rejala Helman of the Hagamos Party has called for Paraguay to take similar action to El Salvador regarding bitcoin. The congressman has also changed his Twitter profile picture to include laser eyes, meaning he eyes bitcoin going to $100K.
The deputy is preparing a bill that seeks to legalize the use of cryptocurrencies in Paraguay as a means of payment, La Nacion reported Friday. The bill will establish that any transaction within the national territory can be carried out with bitcoin and the state will be in charge of promoting and training the different sectors so that they can access this new form of electronic payments, the publication conveyed.
The congressman was quoted as saying:
Since we announced that we are working on a bill that legalizes in Paraguay the use of digital assets, better known as digital currencies, or its most popular version, bitcoin, as legal tender for any type of commercial transaction, various Paraguayan companies have already joined and took a step forward towards the new era of transactions, which makes us proud.
The lawmaker aims to present his bill in congress in July. Noting that the legislation is being prepared, he tweeted on June 17 with the hashtag bitcoin, “July we legislate.” He followed up with another tweet that says: “The presentation of the project is coming on July 14.”
The congressman revealed early this month that he is working with Bitcoin.com.py CEO Juanjo Benitez Rickmann and “the Paraguayan crypto community in order for Paraguay to become a hub for the crypto investors of the world and subsequently to be placed among the ones on the cutting edge of digital technology.”
Rickmann confirmed that he is working with the congressman “to introduce a project in congress so that Paraguay becomes a crypto-friendly country for worldwide crypto investors, taking advantage of the renewable and inexpensive energy provided by hydroelectrics #Itaipu #Yacyreta.”
The congressman tweeted on June 7:
As I was saying a long time ago, our country needs to advance hand in hand with the new generation. The moment has come, our moment.
“This week we start with an important project to innovate Paraguay in front of the world. The real one to the moon #BTC & #paypal,” his tweet further reads.
Meanwhile, cryptocurrency adoption is growing in Paraguay. A major entertainment group in the country, Grupo Cinco, announced last week that all of its 24 business units now accept cryptocurrencies bitcoin (BTC), ether (ETH), shiba inu (SHIB), and chiliz (CHZ). In addition, Universidad Comunera (UCOM), a private university in Asunción, Paraguay, now accepts bitcoin for payments.
Would you move to Paraguay if bitcoin is legal tender there? Let us know in the comments section below.
The hashrate of the Bitcoin network has been steadily falling since June 14 and after Sichuan miners were told to prepare operation shutdowns. Sichuan is the second-densest province in China where most miners are located, according to data stemming from the University of Cambridge. Bitcoin’s hashrate is now hovering just above 100 exahash per second (EH/s).
Bitcoin Hashrate Keeps Falling as Sichuan Farms Shut Down Operations
The hashrate of the Bitcoin network has been steadily falling. The cause of this seems to be the shutdown of several cryptocurrency farms in various provinces including Sichuan. According to the regional publication 8btc news, the Sichuan Development and Reform Commission and Energy Bureau announced it would close the operation of 26 suspected cryptocurrency mining and virtual currency projects on Sunday. Sichuan bitcoin miners leaving to mine elsewhere is a historical event during the leading crypto asset’s 12-year lifespan.
— 8BTCnews (@btcinchina) June 19, 2021
Statements from mining insiders seem to point out the situation is dire for big mining operations. These are the most affected due to its inability to move its operations quickly. The hashrate numbers stemming from Chinese pools have also shrunk: Antpool, Btc.com, Binance Pool, Huobi Pool, and Btc.top have all experienced significant losses of associated hashrate. As a consequence, the Bitcoin hashrate is now hovering over 100 EH/s, almost 50% under its all-time high.
Bitcoin’s price is also stagnating as a result of fears over more forced mining shutdowns in the country. Bitcoin price is now between $33,000 and $34,000 at the time of writing. Other currencies are also feeling the heat, facing important losses.
Location Opportunties Arise
Sichuan is the fifth Chinese province that is shutting down cryptocurrency mining-related projects. Before Sichuan, two provinces also announced the closing of all cryptocurrency mining projects: Inner Mongolia, and Yunan. Other localized closures were announced in Xinjiang earlier last month when Zhundong based miners were ordered to turn off their machines.
Xinjiang is the province where most hashrate resides in all of China, at least according to statistics. A third of all of Bitcoin’s hashrate is located there according to the University of Cambridge. However, this crackdown in Bitcoin mining has spurted opportunities for mining elsewhere.
The mayor of Miami, Francis Suarez, is inviting miners to set up shop in Miami. Suarez stated that the conditions in Miami could be enticing to miners due to the abundance of cheap nuclear power available. Some mining operations are flocking to Kazakhstan and the Chinese ASIC manufacturer Canaan recently established an overseas after-sales center in the region.
Nayib Bukele, the president of El Salvador, is also inviting miners to the country. Bukele announced they would be building geothermal facilities to offer green cheap energy prices to miners just recently. The race to capture these ousted Bitcoin miners is just starting, and other countries might also make their move soon.
What do you think about Sichuan cracking down on bitcoin operations? Tell us in the comments section below.
The professor of applied economics at Johns Hopkins University, Steve Hanke, has recently been criticizing bitcoin adoption taking place in El Salvador. Hanke doesn’t think it’s a good idea for the Latin American country to use bitcoin as legal tender and says it could “completely collapse the economy.”
Steve Hanke Wants Countries to Adopt Currency Boards Instead of Gravitating Toward Bitcoin Adoption
The American economist Steve Hanke knows a lot about currencies, as he is the Cato Institute’s senior fellow and director of the Troubled Currencies Project. Hanke also was the senior economist during the Reagan administration from 1981 to 1982. The economist is critical of central banking and noted in 2018 that the world could use less of them. At the time, Hanke highlighted ten countries that are suffering from hyperinflation and the economist proposed that the countries either adopt the U.S. dollar or create a currency board.
“Countries that employed currency boards have delivered lower inflation rates, smaller fiscal deficits, lower debt levels relative to the gross domestic product, fewer banking crises, and higher real growth rates than comparable countries that have employed central banks,” Hanke said at the time.
Fast forward to three years later, Hanke is now discussing bitcoin (BTC) and the implications of widespread adoption. Hanke is not a fan of bitcoin and has mentioned this fact on numerous occasions. This past April, Hanke tweeted: “Bitcoin bulls hate to discuss the flaws of bitcoin. Cryptocurrencies are the future of money. Bitcoin is not.” The economist also shared an article he wrote, which stresses the use of currency boards over bitcoin.
In the article, Hanke talks about the monetary luminary Milton Friedman and Hanke also said he believes bitcoin comes with a “fundamental value of zero.” Hanke is once again attacking bitcoin after finding out that El Salvador would be leveraging bitcoin as legal tender in the Latin American country. Hanke thinks that nations like China or Russia could use El Salvador to cash out and remove USD from the equation.
“It has the potential to completely collapse the economy because all the dollars in El Salvador could be vacuumed up, and there’d be no money in the country. They don’t have a domestic currency. You’re not going to pay for your taxi ride with a Bitcoin. It’s ridiculous […] You’ve got 70% of the people in El Salvador don’t even have bank accounts, Hanke stressed during an interview with Kitco’s David Lin. Hanke continued:
The big problem with cryptos, in general, is that you can’t convert them into actual real legal tender that’s usable cheaply, and quickly. You can’t Bitcoin, for example, cheaply and easily convert into U.S. dollars.
Nigeria Should Not Follow El Salvador’s Footsteps Says Hanke
Following the economists’ statements with Kitco’s David Lin, Hanke also shared an article on Twitter written by Bitcoin.com News author Terence Zimwara. The article explains how the Central Bank of Nigeria (CBN) has been discussing the country leveraging a digital currency by the year’s end. Hanke did not like this assessment from the CBN and said if it was like El Salvador’s idea, it would likely lead to ruin. Hanke tweeted:
If Nigeria’s plans for a digital currency is anything like El Salvador’s Bitcoin plan, it will FAIL. Instead of toying with nutty ideas, Nigeria needs to establish a USD-denominated Currency Board, like the one it had between 1913-1959.
Zimbabwean fintech lawyer and crypto proponent Prosper Mwedzi responded to Hanke’s statement about Nigeria and said: “I think a digital currency for Nigeria could improve bc access to financial services depending on [the] design.” Further, a number of others disagreed with Hanke’s commentary and replied to his scathing Nigeria/bitcoin tweet.
“Hanke only has a hammer (USD Currency Board) so to him, everything looks like a nail,” another individual wrote. “Bitcoin has no such restrictions and will keep saving weak economies,” the person added.
What do you think about Steve Hanke’s commentary about El Salvador and Nigeria? Let us know what you think about this subject in the comments section below.
On Saturday, cryptocurrency analysts and traders have been discussing bitcoin’s recent chart patterns and the infamous death cross pattern has been a topical conversation. A number of traders believe when bitcoin’s short-term moving average (MA) dips below the long-term MA, the crypto asset could be bracing for a major sell-off. Meanwhile, others are sure the death cross technical pattern means the price is due to rebound and possibly double-top to higher values than the previous all-time high.
The Return of the Infamous Death Cross
On June 19, a number of Twitter conversations, forum posts, and even headlines discussed the technical pattern called the death cross in regard to bitcoin’s (BTC) chart. Bloomberg published an article concerning the death cross on Saturday and the publication featured a few statements from billionaire investor Mark Cuban. The definition of a death cross stemming from Investopedia notes the pattern suggests “the potential for a major sell-off.” The website’s definition adds:
The death cross appears on a chart when a stock’s short-term moving average crosses below its long-term moving average. Typically, the most common moving averages used in this pattern are the 50-day and 200-day moving averages.
However, the death cross doesn’t necessarily mean a bearish market is due. Investopedia details that death cross events led to traditional stock market crashes during the past century including 1929, 1938, 1974, and 2008. Death crosses are not unusual and data from Canterbury Investment Management indicates the Dow Jones Industrial Average has experienced 84 death crosses since 1929. The popular economist and trader Alex Krüger recently discussed the situation of a death cross in relation to BTC/USD charts.
“The Death Cross takes place when the 50 day moving average crosses below the 200 day moving average,” Krüger tweeted. “The Death Cross takes place when the 50 day moving average crosses below the 200 day moving average. Journalists love writing about how a death cross could bring forth a bear market. However, one week historical returns following a bitcoin death cross are POSITIVE. Relax,” Krüger stressed.
The popular creator of the bitcoin stock-to-flow model, Plan B, also tweeted about the infamous death cross on Saturday. “Study this chart to see what happened [the] last two times the death cross happened, Q4 2019 and Q1 2020,” Plan B said to his 566,000 followers.
However, an individual named Mohit Sorout responded to Plan B’s tweet and noted that there’s been a number of death cross occasions throughout bitcoin’s lifetime.
“There have been 6 past death crosses in bitcoin’s lifetime,” Sorout replied to Plan B. “4 have resulted in enormous downside. The two that didn’t lead to a downtrend were towards the end of a bear market, not after a full blown bull run. Choose your bias wisely,” he added.
Bitcoin Traders Hope a 2013 Double-Top Pattern Emerges
The creator and host of CNBC’s Crypto Trader show Ran Neuner also wrote about the death cross on Saturday too. “Bitcoin shorts are being closed,” Neuner said. “This is confirmation that the shorts were speculative and that it wasn’t miners hedging. We said this would happen in anticipation of the ‘death cross’ that should cross around the 24th June. Expect more FUD. I’m not selling.”
A crypto enthusiast called Sultan discussed the death cross situation with his followers as well and said that it may mean the worst is behind us. “Death cross,” Sultan wrote. “Ironically, death crosses are often a sign that the worst is already behind us. At the 2019 DC, Bitcoin had already went through a -47% dip before the DC flashed, with a 52% recovery after. And a -64% dip before the 2020 DC, with a quick 150% recovery,” he added. Another person wrote to Plan B and said:
A real death cross is when both MA’s are facing down. Good luck to anyone trading the current cross on BTC.
No one really knows what will happen even though a number of traders are confident their predictions will play out. Investor and market watcher John Hostetler also talked about the death cross scenario as well on Saturday. “Only a fool could deny that this Bitcoin DeathCross is more like a bearish cross in red than a bullish one in green,” Hostetler said. “But I do like how the BTC price fell this week, as if to say ‘let’s get it over with, then we can rise’”
“In the end, the cross changes little,” Hostetler further stressed. “Big question remains: has this halving cycle peaked? 2 weeks ago I would’ve assigned that a 1% possibility, because I hadn’t looked at the now-dismal chart of Bitcoin S2F multiple in a while. Since then I have raised the odds to ~20%. But that still leaves 80%. So I continue with the Bitcoin double top model, drawing hope from the summer of 2013, when $BTC came within a breath of a Death Cross: grey arrow on the chart,” he concluded.
What do you think about the bitcoin death cross chart pattern? Do you expect a bear market or a bull market going forward? Let us know what you think about this subject in the comments section below.
The Ministry of Interior of the Islamic Republic has suspended the Iran Blockchain Association (IBA). The measure comes after the organization allegedly breached government regulations. IBA unites participants in the country’s growing crypto sector who are engaged in blockchain technology development.
Iranian Authorities to Review IBA Dealings With Crypto Exchanges
The Iranian government has moved this week to block activities of the Iran Blockchain Association, the Financial Tribune business daily reported on Sunday. The Ministry of Interior banned the prominent crypto industry organization following various accusations including that the IBA was operating against its own articles of association.
According to a notice published by the Persian-language newspaper Hamshahri Online on Wednesday, IBA was also ordered to submit detailed reports about its financial performance and activities to Iran’s Social Affairs Organization. The government is particularly eager to learn more about the association’s interactions with cryptocurrency exchanges, the publication revealed.
Earlier in June, a member of the Iranian parliament, Rahim Zare, accused “domestic NGOs involved in cryptocurrencies” of transferring foreign currency overseas, without providing any evidence to support the claim. IBA strongly denied any wrongdoing stating that its efforts were focused on promoting blockchain technology development.
Established in 2017, the Iran Blockchain Association operates as a nonprofit and self-governing body of entrepreneurs, experts and activists involved in the blockchain industry. One of its key priorities is to spread awareness among Iranians and prevent losses from cryptocurrency scams. The association stated:
Informing people and the authorities on risky websites and fraud cases is among IBA’s objectives.
Iran Blockchain Association Hit After Exposing High-Risk Crypto Companies
The new government notice was never delivered to the association and its board members, the head of the IBA Sepehr Mohammadi said in a press release on the its website. The publishing of a crypto alert could have become the main reason for the ban, he pondered. The IBA recently released a list of high-risk domestic companies involved in cryptocurrency-related business. Mohammadi further commented:
Obviously, vested interests will do anything to stop IBA’s efforts. They managed to publicize the notice before IBA was informed.
With rising crypto prices over the past year, a growing number of Iranians have started investing in bitcoin and other digital assets, turning away from traditional markets such as forex, gold and stocks. A recent study by the Tehran Chamber of Commerce has estimated that around 12 million Iranians have already put money into cryptocurrencies. Bitcoin trade in Tehran alone amounts to around 30 – 40 trillion rials ($130-174 million), found a separate study carried out by the High Council of Cyberspace.
In March, the Central Bank of Iran (CBI) ordered the country’s domestic payment settlement network Shaparak to block online payment gateways of crypto exchange websites. The IBA criticized the move stating that measures against innovative technologies are costly and unsuccessful.
“Technology moves forward come what may,” the association said, warning that the blocking of local crypto portals will simply push Iranians towards foreign platforms. Similar concerns were echoed by Iran’s economy and finance minister Farhad Dejpasand who concluded this month that the government cannot stand in the way of crypto development indefinitely.
What’s your opinion about the ban imposed on the Iran Blockchain Association? Share your thoughts on the case in the comments section below.
The Bank of Uganda (BOU) has announced the launch of a regulatory sandbox that will allow fintech start-ups to test their innovative financial solutions in a controlled environment. Already, one firm, M/S Wave Transfer Limited, has received approval to test its quick response (QR) technology under this sandbox arrangement.
BOU Launches Regulatory Sandbox for Fintech
In its statement on June 15, the BOU says it is now inviting more firms to develop and similarly test their financial innovations under this framework. Meanwhile, the BOU statement also expands on why the central bank has chosen to launch the sandbox. The statement explains:
The Regulatory Sandbox Framework will promote financial services innovation, attract capital and funding for fintech firms, and provide shared learning opportunities for the innovators and regulators. This is expected to promote uptake of electronic payments, digital financial services and financial inclusion in general.
Meanwhile, according to a March 5, 2021 Ugandan government statutory instrument, the BOU will conduct “a fit and proper test on each substantial shareholder, director or manager of the applicant.” In addition, the central bank will also determine if “an applicant meets the criteria and minimum requirements for operating a sandbox.”
According to the statutory instrument, some of the determining factors that the BOU will consider include whether the innovation is genuine or whether the sandbox has consumer benefits and safeguards. The central bank will also consider the sandbox’s readiness for testing as well as the suitability of the exit plan.
In the meantime, the legal document says fintech start-ups that wish to be included in the regulatory sandbox framework will have to pay an application fee of about $290 (one million Ugandan shillings).
What are your thoughts on the BOU’s launch of the regulatory sandbox framework? Share your views in the comments section below.