A regional and economic union of 15 West African nations has expressed concerns over the use of cryptocurrencies in the region because of crypto’s volatility and other risks.
According to a report by news outlet Leadership on Thursday, the member nations said bitcoin‘s decline in recent months was a reminder that cryptocurrencies are not safe-haven assets.
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 personnel were also present at the meeting, according to the report.
The region has had a mixed experience with the nascent asset class. At times crypto has helped the unbanked in the region, although earlier this year, Nigeria’s central bank ordered institutions under its purview to block accounts tied up in crypto. It has since softened its stance.
ECOWAS also said 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 pointed to crypto’s insecure liquidity in comparison to the $6.6 trillion foreign exchange market and the fact that 96% of cryptocurrencies is owned by only 2.5% of users.
CoinDesk was unable to determine where ECOWAS got its figures. Glassnode data show wallet addresses holding more than one bitcoin have been on the decline since the year began, while those holding less than one were increasing.