The recent ban by the Central Bank of Nigeria on cryptocurrency transactions in Nigeria has prompted the Senate to call for a clarification by the Governor of the Central Bank, Godwin Emefiele, and the Securities Exchange Commission.
Via its Committees on Finance, Insurance and Other Financial Institutions; ICT and Cybercrime; and Capital Market, the Senate invites the apex bank and SEC to brief the Committees on the opportunities and challenges of the Blockchain to the economy and security of the nation and to bring back results within two weeks.
The resolution was accompanied by the consideration of a motion and the subsequent acceptance by Senator Hassan Hadejia (APC-Jigawa North-East) of a proposed amendment to her resolution.
Senator Istifanus Dung Gyang (PDP-Plateau North), sponsor of the motion, drew the Upper Chamber’s attention to the recent Central Bank of Nigeria directive, stopping all financial institutions from transacting in cryptocurrencies, while recalling previous apex bank directives in January 2017 and February 2018 that prohibited banks from using, keeping, trading and transacting in cryptocurrencies.
The legislator noted that “the CBN’s decision is said to have been based on the need to safeguard the Nigerian economy from the adverse effects of unregulated digital or virtual currencies issued by anonymous entities and secured by cryptography under the Cryptocurrency regime.”
Gyang noted that the CBN views cryptography as a financial system that encrypts and hides codes that avoid oversight, transparency, and regulation, thus breaching and violating established legislation as only the Central Bank is allowed to issue legal tender by statute.
“Concerned that Crypto currency by nature is anchored on anonymity, obscurity and concealment of its patrons and actors making it difficult if not impossible to trace, track and uncover those that may deploy it for ignoble and illegal usage such as money laundering, terrorism financing, drug purchase, cybercrime, etc.
“Aware that the action and directive of the CBN has attracted sharp reactions from Nigerians and has become a topical subject of National discussion; and.
“Realized that Cryptocurrency is both an opportunity and a threat, hence the Senate has a responsibility to ensure that the nation and citizens do not miss out on the opportunities that Cryptocurrency offers and in the same vein, mitigate and prevent likely consequential effects on the nation’s economy and security,” Gyang said.
Senator Mukhail Adetokumbo Abiru (APC-Lagos East), co-sponsor of the motion, advanced side-by-side reasons for and against the accommodation of crypto-currency transactions in financial institutions in Nigeria.
According to him, the economic advantages of crypto-currency transactions cannot be eroded by a ban on the Central Bank.
Abiru said, “In Nigeria in particular, it is also important to underscore the fact that in the last five years, we have had people trading in cryptocurrency to the tune of over $500 million dollars, that’s to tell you how it is gradually gaining traction.
“Last year in particular, we had over $140 million dollars invested in cryptocurrency. Just like my colleague rightly said, there are challenges that cryptocurrency has also brought to the fore.
“You have the challenge to the financial system stability on its own, that is why the CBN is concerned; you also have the issues around cybercrime and also terrorism.
“Now, in particular, we must also mention that last year, during the EndSARS protest – the CBN banned the account of the EndSARS young lads – cryptocurrency was what they resorted to.
“Clearly, what it is telling us is that it is good to ban because of the challenges it has also presented. But, honestly, the reality is that banning it doesn’t take it away.”
The lawmaker, added, “In the US, as it is planning to come about the stimulus package of about $1.9 trillion dollars, one of the major investors there, Elon Musk, just recently on Monday put in about $1.5billion of his assets into cryptocurrency.
“What that has done is that the value of cryptocurrency has been further enhance. Today, I understand it is within the region of about $50,000 (USD) per Bitcoin.
“Even our Securities and Exchange Commission also agree and recognize cryptocurrency as a financial asset that they need to regulate their framework around.”
SOURCE: THE GUARDIAN