In an apparent reproof of the Central Bank of Nigeria, the country’s Vice President Yemi Osinbajo said Nigeria’s monetary officials must seek ways to regulate digital assets rather than restricting their use.
CBN prohibited this month banks and financial institutions from facilitating transactions in cryptocurrencies like bitcoin, warning that failure to comply with the order could face severe regulatory penalties.
Nigeria’s Securities and Exchange Commission has sought to regulate virtual currency investments on the premise that they qualify as securities transactions.
Both the CBN and SEC said they had identified certain risks within the crypto asset sector, without providing further details.
Strong crypto regulation needed
For the part of Osinbajo, he pointed out that instead of “killing the goose that might lay the golden egg,” the country’s monetary officials must consider employing robust regulatory governance that will address their concerns.
Still, in his address during the Bankers Committee meeting, the vice president said he fully “appreciates the position” that has been underscored by the central bank. Since the CBN ban went into effect, officials at both the CBN and SEC have defended the ruling.
CBN ban triggers market shock
On Friday, bitcoin (BTC) was trading at a 45% premium on Luno in Nigeria, which means the price of one BTC on the exchange was much bigger compared to its average on other major exchanges of roughly $48,000 at the time. Luno is a subsidiary of Digital Currency Group (DCG), the mother company of CoinDesk.
Marius Reitz, Luno’s general manager for Africa, disclosed to CoinDesk that while liquidity issues do not have a definitive “yes or no” answer, “the letter from the CBN (referring to the ban) caused a market shock.”
Meanwhile, a 2020 survey by Statista revealed that 32% of Nigerians are avid users of cryptocurrencies — the largest proportion of any nation in the world.
Based on estimates, of the top 10 countries for trading volumes, Nigeria ranked No. 3 after the United States and Russia last year, generating more than $400 million worth of transactions, according to BBC.
Image courtesy of Cointelegraph News/YouTube
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Source: https://bitcoinerx.com/blockchain/nigerian-vice-president-rebuts-central-bank-says-crypto-must-not-be-banned/
