Mixed reactions trail CBN’s orders to banks on cryptocurrency traders’ closure
By Joshua Elekwachi, Abuja
Mixed reactions have continued to trail Central Bank of Nigeria’s (CBN) directive to all banks and other financial institutions to close accounts of persons or entities involved in cryptocurrency transactions within their systems.
In January 2017, CBN had said digital currencies such as bitcoin, litecoin, and others are largely used in terrorism financing and money laundering, considering the anonymity of virtual transactions.
A circular signed by Bello Hassan, director for banking supervision, and Musa Jimoh, director of the payment system management, CBN, said “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”
The Head of Banking and Finance Department at the Nasarawa State University Keffi, Professor Uche Uwaleke, in his reaction said, “Given the weighty nature of the directive, I want to believe that the CBN must have consulted relevant stakeholders including the Bankers Committee before taking the decision.
“I am inclined to believe that it was well thought through and not a unilateral decision. The fact is that what the CBN could see in a squatting position, many cannot see standing.
“So, I think the CBN directive should be seen in the light of this fact that the CBN may have information which may not be available to the public.
“In my view, the flaw in that circular is that it did not state the reason why the apex Bank is taking that course of action. It should have done so especially if it’s to do with fraudulent activities and threats to financial system stability.
“I recall that not too long ago at some point, China, widely seen as the home of cryptocurrencies, had to ban trading in bitcoins.
“I believe this measure is only temporary. Given that cryptos have come to stay, the CBN and the SEC should come up with a regulatory framework for crypto asset trading in Nigeria.”
A financial expert, Olumide Balogu said the CBN policy has been there for a while and that the recent memo is just to reiterate its position on cryptocurrency.
He said the directive would have no effect on the financial institution since cryptocurrency has never been legally integrated into the country’s financial institutions.
Reacting to the directive, a former presidential aspirant under the All Progressive Congress (APC), Adamu Garba argued that cryptocurrency traders are supposed to be regularized so that they can be tracked in the event of cheats.
Registering his displeasure to the directive by the apex bank, a human rights activist, Henry Shield said “a thinking country will assemble intelligent Economist/Financial experts to dissect the cryptocurrency system and see what it can do to make it benefit the country.”
According to him, CBN banning cryptocurrency is the worst decision by the current administration.
He revealed the ban would not increase value of naira and called on the CBN to reconsider its decisions.
On her own, a former education minister, Dr. Oby Ezekwesili revealed that what the CBN needed to do was to map all the legitimate risks associated with cryptocurrency and gather a subset of the super brilliant Nigerian young minds in the Fintech to listen and learn more, stressing that learning is the greatest asset of the policy maker.
