Moghalu, blockchain association president ask CBN to regulate, unban cryptocurrency in Nigeria

Experts across different industries have said the best approach to benefit from the cryptocurrency market is to regulate it and not ban it.

The Central Bank of Nigeria (CBN) had recently issued a directive to deposit money banks (DMBs), non-financial banks, and other financial institutions not to provide banking services to entities dealing with cryptocurrencies, including exchanges.

Speaking on the issue on Channels Television recently, former presidential aspirant and former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu said although the directive from the apex bank was not the best approach, the clarity should be made that it is a ban on financial institutions not to engage in cryptocurrencies, not on trading activities.

“It is mainly targeted at cryptocurrency exchanges. Hence, it does not criminalise individuals trading in cryptocurrencies. Individuals would likely have difficulties in making transactions since the activities of the exchanges are limited.

“The CBN has said it is not a legal tender but they don’t have to tell you or me what we can exchange for value. If I want to give you my shirt and you give me your shoe the Central Bank has no business with it,” Moghalu said.

Moghalu explained that the cryptocurrency market employs hundreds of Nigerians and it has also created new value chains that are bound to be impacted by the CBN’s decision. aside from facilitating $500 million in transactions in the last five years.

He further explained that the increasing adoption of cryptocurrencies in Nigeria and the instability that it brings to the economy should have been enough for the CBN to explore a different approach.

Moghalu added that the Nigerian economy is still in recession and the foreign exchange continues to be limited for manufacturers and other businesses that need it for daily operations. He also noted that the world is going digital, hence there is a lot of innovation and cryptocurrencies are part of that.

“My attitude would have been how can we best manage the risks of cryptocurrencies to ensure that they do not affect the stability of the financial system.

“But I would not recommend banning it outright in exchanges because $500 million worth of bitcoin has been traded in Nigeria within the last five years.

“Nigeria is one of the top ten countries in the use of cryptocurrencies in the world today. In fact, it comes in at eight after countries like Ukraine, South Africa, Kenya, and so on. It is becoming a real factor in our financial system or investment ecosystem and this is livelihood for Nigerians. So it’s like you are taking away opportunities from Nigerians, especially in a depressed economy,” he said.

Also speaking, president of Stakeholders in Blockchain Association of Nigeria (SiBAN), Senator Ihenyen, said that efforts to engage the CBN to regulate the cryptocurrency market in Nigeria have been unsuccessful since 2017.

He said that regulation is the approach most developed countries have embarked which has seen some come up with a robust regulatory framework.

“The United States currency regulator recently allowed banks to trade in stablecoins. Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference like the US dollar. “Singapore, Iceland, and Malta have become top destinations in blockchain investment because of their approach to regulating the market,” Ihenyen said. 

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