In light of growing concern on the cryptocurrency ban in Nigeria, the Presidency, National Assembly and other key stakeholders may gather to review and possibly revert the central bank’s earlier directive.
According to a report made available to Financial Street, Nigerian technology industry leaders have demanded to engage the above-named stakeholders and others regarding the ban placed on cryptocurrency trade in the country.
If not collectively looked into, the tech experts asserted, the implication of an outright ban might outweigh the associated risks identified by the Central Bank of Nigeria.
They argued that a ban on cryptocurrency trade could stifle innovation in Financial Technology, create policy conflict and disincentive for business and ease of doing business.
“The CBN directive will frustrate Foreign Direct Investment and shut down investment opportunities through the cryptocurrency market. Similarly, cryptocurrency traders will find alternative accommodative jurisdictions in Africa to migrate their businesses,” the tech experts added.
The report, ‘Much Ado about Cryptocurrency: A Path to Regulated Cryptocurrency Environment’, was signed by 15 representatives from the Nigerian tech industry, including Kola Aina, Adia Sowho, Iyinoluwa Aboyeji, Edmund Olotu and Sanusi Ismaila.
The CBN had, in a circular on Friday, February 5, 2021, directed all Deposit Money Banks and Other Financial Institutions to immediately close all accounts associated with cryptocurrency trading in the country.
“We would recommend that, as a next step, we convene a forum to discuss the issues set forth above with critical stakeholders,” the statement from the tech experts read in part.
The critical stakeholders referred to include the Presidency; CBN officials; Senate and House of Representatives committees on banking, insurance and other financial institutions; Securities and Exchange Commission; representatives of global and local cryptocurrency exchanges; chief executive officers of banks, among others.
The proposed forum is expected to look into the presentation of the concept of the Nigerian International Financial Centre by the CBN, presentation of the guidelines for the regulation of cryptocurrency by SEC, discussions around conditions for on and off-ramps for cryptocurrency into and out of the banking system and prudential guidelines for offshore banks, it further stated.
The dangers of not lifting the ban would create underground market, as well as a room for human rights violation and criminalising of the youth, the report warned.
“The current CBN directive will force a move to Peer-to-Peer platforms, which are largely non-custodial. This will expose market participants to nefarious activities, thereby reducing the government’s tracking ability in its entirety while creating gaps for more fraudulent practices.
“Driving an underground market will expand the register of illegality around cryptocurrency trade and increase the demand for anonymity and concealment.
“The directive may lead to unfair profiling and harassment from law enforcement authorities of anyone with any crypto trading application on their phone. This situation may exacerbate the current suffering from stereotypes attached to young Nigerian entrepreneurs in technology,” the report added.