The Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has said the bank’s decision to prohibit deposit money banks, non-banking institutions and other financial institutions from facilitating trading and dealings in cryptocurrency is in the best interest of Nigerian depositors and the country’s financial system.
Emefiele stated this yesterday while briefing a joint Senate Committee on Banking, Insurance and Other Financial Institutions; ICT and Cybercrime and Capital Market, on its directive to institutions under the apex bank’s regulation.
Describing the operations of cryptocurrencies as risky and opaque, the CBN Governor said using cryptocurrency contravened an present law. He said given the fact that cryptocurrencies were issued by means of unregulated and unlicensed entities made it opposite to the mandate of the apex financial institution as enshrined in the CBN Act (2007) declaring it as the issuer of criminal tender in Nigeria.
Emefiele, who also differentiated between digital currencies, which crucial banks can issue and cryptocurrencies issued by using unknown and unregulated entities, confused that the anonymity, obscurity and concealment of cryptocurrencies made it suitable for individuals who indulge in unlawful sports along with money laundering, terrorism financing, purchase of small arms and light guns and tax evasion.
Citing instances of investigated criminal activities that have been connected to cryptocurrencies, he stated that the legitimacy of cash and the protection of Nigeria’s monetary device was vital to the mandate of the CBN, even as he declared that “Cryptocurrency isn't legitimate cash” as it isn't created or subsidized by way of any principal bank.
“Cryptocurrency has no vicinity in our financial machine presently and cryptocurrency transactions ought to not be executed through the Nigerian banking gadget,” he delivered. Emefiele also emphasized that the financial institution’s actions were now not in any way, form or shape inimical to the development of FinTech or a technology-pushed payment machine. On the contrary, he noted that the Nigerian fee gadget had advanced notably over the last decade, surpassing those of a lot of its opposite numbers in rising, frontier and superior economies boosted with the aid of reforms pushed by using the CBN.
While urging that the problem of cryptocurrency be handled with caution, the CBN Governor assured that the Bank could preserve its surveillance and deeper knowledge of the digital area, stressing that the last intention of the CBN changed into to do all inside its regulatory powers to educate Nigerians on rising economic dangers and protect our financial gadget from the activities of currency speculators, cash launderers, and international fraudsters.
• Also speakme, the Director-General of the Securities and Exchange Commission
(SEC), Mr. Lamido Yuguda clarified that there has been no coverage contradiction among the
CBN directive and the pronouncements made by means of the SEC with reference to
cryptocurrencies in Nigeria. He explained that the SEC made its pronouncement on the
time to provide regulatory reality within the virtual asset space due to the growing
volume of reported flaws.
Prior to the CBN directive, he said the SEC had, in 2017, advised the general public at the
risks involved in making an investment in digital and cryptocurrency, including that the CBN, Nigeria
Deposit Insurance Corporation (NDIC) and the SEC between 2018 and 2020 had additionally
issued warnings on the dearth of safety in investments in cryptocurrency.
Yuguda in addition disclosed that following the CBN directive, the SEC had put on maintain the
admittance of all individuals laid low with CBN circular into its proposed regulatory
incubatory framework so that it will make certain that handiest operators that are in complete compliance
with extant laws and rules are admitted into the framework for regulating virtual
assets.
Similarly, the Chairman of the Independent Corrupt Practices and Other Related
Offences Commission (ICPC), Prof. Bolaji Owasanoye highlighted the risks inherent in
investing in digital belongings and cryptocurrencies in Nigeria.
He explained that cryptocurrencies posed critical criminal and law enforcement risks for
Nigeria because of its opaque nature and illicit financial flows, including that the contemporary flow
via the Federal Government to hyperlink National Identification Numbers with SIM playing cards
attested to the truth that terrorists, kidnappers, bandits and perpetrators in unlawful acts
had relied on the protect furnished by using anonymity to dedicate heinous crimes.
Earlier in his welcome remarks, the Chairman of the Joint Senate Committee, and
Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions,
Senator Uba Sani, stated the committee became on a fact-finding undertaking and had no
preemptive advice or stand and would make its function regarded only after it
had reviewed the submissions made with the aid of stakeholders.
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