Experts in the financial sector have advised the Central Bank of Nigeria (CBN) to consider regulating cryptocurrency instead of an outright ban because of the benefits it offers to innovative youths.
President, Stakeholders in Blockchain Association of Nigeria (SiBAN), Senator Ihenyan, said all efforts made since 2017 to engage the CBN to regulate the cryptocurrency market in the country were futile.
He observed that regulation is the approach most developed countries have taken which has some come up with a robust regulatory framework. The United States currency regulator recently allowed banks to trade in stablecoins.
Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference like the US dollar. Singapore, Iceland, and Malta have become top destinations in blockchain investment because of their approach to regulating the market.
In his own view, former Deputy Governor of the CBN, Kingsley Moghalu, criticized the apex bank over the ban. He said that although the CBN had previously put out a circular as far back as 2017, warning that cryptos weren’t legal tender, “the SEC recognizes crypto as a financial asset and in September they said they were going to put out a regulatory framework for that.”
“My attitude would have been how can we best manage the risks of cryptocurrencies to ensure that they do not affect the stability of the financial system. But I would not recommend banning it outright in exchanges because $500 million worth of bitcoin has been traded in Nigeria within the last five years. Nigeria is one of the top 10 countries in the use of cryptocurrencies in the world today. In fact, it comes in at eight after countries like Ukraine, South Africa, Kenya, and so on. It is becoming a real factor in our financial system or investment ecosystem and this is livelihoods from Nigerians. So when you take actions that look as if you are taking away opportunities from Nigerians, especially in a depressed economy,” he said.
