Stakeholders in the financial sector have called for a regulatory framework for blockchain and cryptocurrency transactions in Nigeria.
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They made the call on Tuesday in Abuja, at a Blockchain/Cryptocurrency Policy conference organized by the National Chamber Policy Centre (NCPC) of the Abuja Chamber of Commerce and Industry (ACCI).
It would be recalled that the Central Bank of Nigeria (CBN) had in February directed that deposit money banks, non-bank financial institutions, and other financial institutions should not deal with cryptocurrencies and facilitate payments for cryptocurrency providers in Nigeria.
Mr. Olawale Rasheed, the Executive Director, NCPC, said that in spite of the ban, Nigeria remains one of the top destinations for crypto trading with values increasing on a quarterly basis.
He said that it was necessary to adopt necessary regulatory steps to reap the benefits and contain the negative exposure observable in the sector.
According to Rasheed, nations except China are not banning but rather creating structures to accommodate the crypto industry that is now almost two trillion dollars worldwide.
“The NCPC is, therefore, convinced that perceived evil of cryptocurrency should create a sense of urgency for the state to regulate rather than shut off or shut down the sector,” Rasheed said.
Prof. Uche Uwalaka, the President of the Association of Capital Market Academics of Nigeria, expressed concern that at present, there was no law specifically directed at cryptocurrencies or crypto assets.
According to him, there is an identity crisis in relation to the treatment of virtual currencies and assets in Nigeria.
“This explains in part why the CBN and the Securities and Exchange Commission appear to be asserting overlapping jurisdiction for market participants transacting in virtual currencies or other digital assets,’’ Uwalaka said.
He said that the existing financial regulations were inadequate to monitor and guide cryptocurrency activity in the financial system.
“They are also insufficient to protect the financial system from key risks such as fraud, money laundering, and the irreversibility of erroneous transactions."
“The government should do more to support blockchain innovation and adoption through supporting public sector adoption, creation of a flexible regulatory environment to allow experimentation, and using targeted regulatory enforcement,’’ he said.
Uwalaka further said that cross-jurisdictional cooperation and government-industry collaboration were essential to developing a blockchain and cryptocurrency policy for Nigeria.
On his part, the Vice-Chancellor, University of Abuja, Prof. Abdul-Rasheed Na’ Allah said there was a need to educate Nigerians more on the issues of cryptocurrency.
Represented by Dr. James Adefiranye, the Deputy Director, Centre for Entrepreneurship Studies, University of Abuja, Na’ Allah said that it was important to ensure the end-users of cryptocurrency were protected.
“Can we look at our country Nigeria itself because of the poverty level and the rate at which we want to make money quickly?"
“An average Nigerian today is extremely gullible and that has really exposed a lot of people to be defrauded easily."
“For this to be really successful in Nigeria, we must start by looking at Nigeria itself. We must look at people that understand blockchain, the technology, and the issues of cryptocurrency to know how they work.
“They need to get awareness on the various channels and avenues by which fraudsters could take advantage of their zeal to make money and that is basic."
“As soon as efforts are made to successfully get this on the table and every other body gives their nod to it, from that moment fraudsters will be on top of their game as usual."
“And what they do, therefore, is how do we get in and confuse these people as usual."
“We mean to convince and then people will then pay into wrong accounts."
“So, until we carry everyone along and enlighten as appropriate we may not be able to smile at the end of the day,’’ he said.
Mr. Toye Soladoye, the Chief Technology Officer of Union Bank, said that there should be core policies that would help in regulating cryptocurrency providers in Nigeria.
According to Soladoye, the outright ban will cost Nigeria so much, being a leader in the cryptocurrency space.
While emphasizing the importance of embracing the potential of cryptocurrency together with blockchain technology, he said that regulation was important to check irregularities.
Mr. Gideon Ereh, a cryptocurrency investor said “if it is not regulated people will use it to finance terrorism and all sorts of things that can destroy a nation’’.
