The Implication of the Ban On Cryptocurrency in Nigeria
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The Ban on Crypto Currency has attracted attention from the highest levels of government. The Nigerian Senate deliberated on the CBN’S directive and some senators gave their reservations. The Senate resolved to invite the CBN governor to give a briefing on the actions of the CBN.
The CBN Governor, Godwin Emefiele appearing before a joint Senate Committee on Banking, Insurance and Other Financial Institutions; ICT and Cybercrime, has affirmed Nigeria’s central bank resolve in continuing its surveillance and deeper understanding of the crypto ecosystem, buttressing that its major objective remains to educate Africa’s largest economy on emerging financial risks and protect Nigeria’s financial system from the activities of money launderers, currency speculators, and foreign-based fraudsters.
The necessity of balancing regulation with innovation has risen in recent years with the exponential growth of Nigeria’s FinTech industry, which has attracted significant interest from foreign investors. Unfortunately, it has also exposed the seeming cluelessness of the regulators who have struggled to keep up with the rapid developments in the industry.
Although the rationale for the CBN’s decision is yet unknown, there are indications that it may not be unconnected with foreign currency controls and the 97% drop in remittances through official channels, between January 2020 and September 2020. Notwithstanding the justification, the hastiness with which the decision was reached, particularly without an attempt to engage the industry, is unbecoming of a regulator of the financial industry.
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