By Aduragbemi Omiyale
Vice President Yemi Osinbajo has disagreed with the Central Bank of Nigeria (CBN) on the ban on cryptocurrency trading in the country.
A few weeks ago, the apex bank directed financial institutions in the country to close all bank accounts of persons or organisations trading the digital currencies.
It was speculated that the central bank prohibited crypto trading, including the ability to buy Ripple in Nigeria because the youths used the means to fund the 2020 EndSARS protests across the nation.
Speaking at a one-day economic summit, the Vice President advised the CBN to take a critical look into the policy and come up with ways to regulate the system.
According to him, rather than adopt a policy that prohibits cryptocurrency operations in the country, “we must act with knowledge and not fear” and develop a robust regulatory regime that is thoughtful and knowledge-based.
“I fully appreciate the strong position of the CBN, Securities and Exchange Commission (SEC) and some of the anti-corruption agencies on the possible abuses of cryptocurrencies and their other well-articulated concerns. But I believe that their position should be the subject of further reflection.
“There is a role for regulation here. And it is in the place of both our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs.
“So, it should be thoughtful and knowledge-based regulation, not prohibition. The point I am making is that some of the exciting developments we see the call for prudence and care in adopting them, but we must act with knowledge and not fear,” Mr Osinbajo said at the event organised by the CBN, the Banker’s Committee and the Vanguard Newspaper.
At the summit themed Bankers’ Initiative for Economic Growth, the Vice President emphasised the need for monetary authorities to rethink their stand on cryptocurrencies.
“There is no question that blockchain technology generally and cryptocurrencies, in particular, will in the coming years challenge traditional banking, including reserve (central) banking, in ways that we cannot yet imagine. So, we need to be prepared for that seismic shift and it may come sooner than later,” he added.
“Already, remittance systems are being challenged. Blockchain technology will provide far cheaper options for the kind of fees being paid today for cross-border transfers.
“I am sure you are all aware of the challenge that the traditional SWIFT system is facing from new systems like Ripple which is based on the blockchain distributed ledger technology with its own crypto tokens.
“There are, of course, a whole range of digital assets spawned daily from block-chain technology. Decentralized finance, using smart contracts to create financial instruments, in place of central financial intermediaries such as banks or brokerages is set to challenge traditional finance.
“The likes of Nexo finance offer instant loans using cryptocurrency as collateral. Some reserve banks are investigating issuing their own digital currencies,” Mr Osinbajo stated.
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