At a breakfast meeting early this week, organized by the Chartered Institute of Bankers in Nigeria (CIBN), key players in the country’s fintech space gathered to discuss the impact of cryptocurrencies, specifically bitcoin, and blockchain technology. The Deputy Director of the Central Bank of Nigeria’s Banking and Payments System (CBN), Musa Itopa-Jimoh, spoke at the meeting. In an interview afterwards, he clarified the CBN’s stance on bitcoin, citing that a lot of people misinterpret the central bank’s recent warning.
The meeting was entitled ‘Virtual/Cryptocurrency: Evolution, Regulatory Challenges and Impact on the Future of Payments and Settlement Systems’. Dr. Uche Olowo, First Vice President of the CBN, in his opening remarks, talked about why the institute considers this topic crucial for the Nigerian financial market, starting with bitcoin.
Citing both curiosity and caution about bitcoin from the global financial community, he said “on the one hand interested parties view it as the highest performing and the most valuable currency in the world”. On the other hand, “it is seen by most traditional financial players as unstable and complicated, and with doubts of its inherent value”. Nonetheless, he said that bitcoin “has the power to greatly affect the more traditional means of payments and settlement systems, globally”.
The impact of cryptocurrencies was discussed throughout the event, and after the meeting, Mr. Musa Itopa-Jimoh said:
Central bank cannot control or regulate bitcoin. Central bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the Internet. We don’t own it.
Previous Warnings about Cryptocurrencies
Nigeria has issued several warnings against a few cryptocurrencies in the past, including bitcoin. On January 12, the CBN issued a circular to banks and other financial institutions on virtual currency operations in Nigeria, requiring them to take certain actions relating to digital currencies. The notice reads: “The CBN reiterates that VCs [virtual currencies] such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc, and similar products are not legal tenders in Nigeria, thus any bank or institution that transacts in such businesses does so at its own risk”.
On the same day, the Nigerian Securities and Exchange Commission (SEC) issued a statement cautioning citizens from investing in Bitcoin, Onecoin, and Swisscoin. Putting them in the same category, the SEC told the Nigerian public that such investments are risky by nature and some of them are “fraudulent pyramid schemes.” The public notice reads “The public is hereby advised to exercise extreme caution with regard to digital (cryptocurrencies) as a vehicle of investments”.
CBN: ‘We Can’t Stop Bitcoin’
Despite all the warnings, Mr. Musa Itopa-Jimoh clarified that the CBN has no intention of stopping bitcoin usage. “We are not the issuing authority for bitcoin. It’s not our currency. We do not control it. We don’t issue it, we don’t control it,” he said. “we are just issuing caution to Nigerians”, he continued, citing that if they participated in cryptocurrencies, they cannot come to the CBN for consumer protection “because it is not within our control”. He noted that:
A lot of people misinterpreted it that we wanted to stop bitcoin. We can’t stop bitcoin. Bitcoin is not an invention of 2015 or 2012; it’s not even an invention of 2010. So, how can the Central Bank of Nigeria, not central bank of the world, stop the running and implementation of bitcoin?
He added that all the CBN is doing is cautioning Nigerians when dealing or investing in digital currencies since they are not under the control of the central bank.
What do you think of the CBN’s stance on bitcoin? Let us know in the comments section below.
Images courtesy of Shutterstock, CIBN and the CBN
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