Crypto

Tether's Success Sparks Banks' Interest in Stablecoins | PYMNTS.com

Published

3 days ago

December 29, 2024

Tether's Success Sparks Banks' Interest in Stablecoins | PYMNTS.com

Inspired by Tether’s success, the world’s banking giants are showing interest in stablecoins.

As Bloomberg News reported Saturday (Dec. 28), some banks are already there, with Societe Generale – Forge (SG-Forge) opening its euro-backed stablecoin to retail investors earlier this year. Revolut is reportedly considering its own version, as is AllUnity, a venture involving the Deutsche Bank-owned DWS.

Meanwhile, the report added, American banks are expected to follow suit once Congress enacts stablecoin legislation. A similar thing happened in Europe: the adoption of the Markets in Crypto Assets (MiCA) regulation and Tether’s decision to discontinue its EURt stablecoin has opened the door for competitors.

“Do I think that other banks will be issuing their own stablecoins?” Jean-Marc Stenger, CEO of SG-Forge, said in an interview with Bloomberg. “The answer is yes. It’s heavy lifting, I am not sure it will happen any time soon, but it will happen.”

He added that his firm is already in discussions with other banks that want to use its stablecoins, and is also exploring partnerships or white-labeling its techs to allow banks to issue their own coins.

Visa, meanwhile, launched a tokenization network in October for banks to issue stablecoins, is collaborating with BBVA on a pilot in next year, and is in talks with many other banks.

“We’ve seen demand from banks in Hong Kong, Singapore and Brazil,” Cuy Sheffield, Visa’s head of crypto, told Bloomberg. “We are actively engaged with a number of banks across the world at various stages of the process.”

As PYMNTS wrote in October, the scale of Visa’s network and its relationship with financial institutions around the world allow it to add stability and legitimacy to stablecoins.

“By enabling banks to issue their own stablecoins and integrate tokenized deposits into their systems, Visa could foster widespread adoption, reducing the risk of market panic that often leads to de-pegging events,” that report said.

“Moreover, as banks enter the fray with their regulatory frameworks in place, the perception of stablecoins as a credible asset class could improve.”

Writing about the issue last week, PYMNTS argued that stablecoins’ rise has become impossible to dismiss, as the currency continues its ascent as the foundation of cross-border and enterprise crypto payments and a bridge to traditional finance.

“Cross-border payments, historically plagued by high fees and slow transaction times, underwent a significant transformation in 2024,” that report said. “Blockchain technology emerged as a key enabler, offering transparency, speed and cost efficiency. Stablecoins played a crucial role, allowing businesses to bypass traditional correspondent banking networks and settle transactions almost instantaneously.”

See More In: AllUnity, Blockchain, Cryptocurrency, digital assets, digital currencies, Jean-Marc Stenger, Markets in Crypto-assets, MICA, News, PYMNTS News, Revolut, SG-Forge, Societe Generale, stablecoins, Tether, Visa, What’s Hot

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Crypto

'Disturbing surge in cryptocurrency fraud' led by young, tech-savvy Nigerian men

Published

36 minutes ago

January 1, 2025

Press Room

'Disturbing surge in cryptocurrency fraud' led by young, tech-savvy Nigerian men

New research shows 55% of cases involve American victims

SURREY, England — In an eye-opening study that sheds new light on the evolving landscape of digital financial crime, researchers have uncovered a striking pattern in Nigerian cryptocurrency fraud: all convicted perpetrators are male, and nearly two-thirds are under 30 years old. This revelation comes from recent research conducted through an unprecedented collaboration between academic institutions and Nigeria’s Economic and Financial Crimes Commission (EFCC).

The study arrives at a critical moment in global digital finance. Nigeria has emerged as the third-largest player in Bitcoin transactions globally, trailing only Russia and the United States, with cryptocurrency transactions reaching approximately $400 million. This surge in digital currency adoption reflects both opportunity and risk in Africa’s most populous nation, where only 36.8% of adults have access to traditional banking services.

“Our research reveals a disturbing surge in cryptocurrency fraud,” says study lead author Dr. Suleman Lazarus, a cybercrime expert at the University of Surrey, in a statement. “We’re observing a rising generation of young, tech-savvy male offenders who adeptly exploit digital platforms and cryptocurrencies to perpetrate high-stakes fraud.”

The research, published in Current Issues in Criminal Justice, reveals a clear geographical targeting pattern, with 55% of cases involving American victims. This international reach demonstrates how digital currencies have transformed the scope and scale of financial crimes, enabling fraudsters to operate across borders with unprecedented ease.

What makes these findings particularly intriguing is the fraudsters’ educational background. Despite the technical nature of cryptocurrency transactions, only a quarter of convicted fraudsters held university degrees, challenging assumptions about the expertise required for such crimes.

The digital toolbox of these fraudsters primarily consists of mainstream social media platforms. Facebook emerged as the preferred platform, used in 27% of cases, followed by Gmail at 22% and Instagram at 14%. These familiar platforms serve as hunting grounds where fraudsters establish trust before executing their schemes.

The financial scale of these operations is staggering. While some cases involved modest sums around $1,000, others reached heights of $475,000 in cash, with one case involving 1,200 Bitcoin – approximately $81.96 million. These figures underscore the lucrative nature of cryptocurrency fraud and its potential for devastating financial impact.

Bitcoin dominates as the preferred cryptocurrency for fraudulent activities, featuring in 46% of cases. This preference likely stems from Bitcoin’s decentralized nature and the relative anonymity it provides, presenting significant challenges for law enforcement in tracking and recovering stolen funds.

“As cryptocurrencies continue to gain popularity, our research serves as a wake-up call for law enforcement agencies, policymakers, and the general public to remain vigilant against the evolving threats in the digital financial landscape,” warns Dr. Lazarus.

The study illustrates how Nigerian cybercrime has evolved from traditional advance-fee scams to sophisticated cryptocurrency operations, reflecting broader changes in global financial systems and highlighting criminal enterprises’ adaptability. In a digital age where cryptocurrency promises financial inclusion and opportunity, this research serves as a crucial reminder of the shadow economy emerging alongside legitimate digital finance.

Paper Summary

Methodology

The study employed a structured approach, examining court records and case files of convicted cryptocurrency fraudsters from two major EFCC commands in Nigeria. Researchers analyzed 22 cases, documenting the fraudsters’ methods, preferred platforms, victim locations, and financial gains. This approach provided verifiable data from official sources, though it necessarily focused only on cases that resulted in convictions.

Results

The findings paint a clear picture: all convicted fraudsters were male, predominantly under 30, with relatively low formal education levels. They primarily used social media platforms, with Facebook being the most common tool. Most targeted American victims, using Bitcoin as their preferred cryptocurrency. Financial gains varied significantly, demonstrating the range of schemes employed.

Limitations

The research faced several constraints. The sample size of 22 cases, while providing valuable insights, represents only convicted cases, potentially missing more sophisticated operators who evade detection. Additionally, the focus on two EFCC commands might not represent the entire country’s cryptocurrency fraud landscape.

Discussion and Takeaways

The research reveals an urgent need for international collaboration in combating cryptocurrency fraud. The predominance of young male offenders and their focus on American targets suggests a need for targeted intervention strategies and enhanced cross-border cooperation in law enforcement.

Funding and Disclosures

The study, conducted in collaboration with Nigeria’s EFCC, underwent ethical clearance from both the University of Portsmouth (clearance number 1110) and the EFCC. The research team reports no conflicts of interest, with one author’s EFCC employment providing valuable access to case files while maintaining ethical research standards.

Crypto

Springfield police reissue warning about cryptocurrency scams

Published

8 hours ago

January 1, 2025

Press Room

Springfield police reissue warning about cryptocurrency scams

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