'Regulation, not prohibition,' Osinbajo against CBN's ban on cryptocurrency trading

The VP says the position of authorities should be that of regulation and not prohibition.

Vice President, Yemi Osinbajo, says the position of authorities should be subjected to further reflection [Presidency]

The Central Bank of Nigeria (CBN) earlier in February directed Deposit Money Banks and other financial institutions to close accounts of people using their systems for cryptocurrency trading.

The ban has been met with widespread outrage but CBN governor, Godwin Emefiele, said earlier this week it is an elimination of possible shady dealings due to the comfort of anonymity provided by virtual currencies.

Even though the ban has enjoyed favourable backing in Aso Rock, Osinbajo said on Friday, February 26, 2021 that the ban is not ideal despite the concerns raised by authorities.

The Vice President said Nigeria must be prepared for the challenge that cryptocurrencies, and blockchain technology generally, will pose to traditional banking.

"There's a role for regulation here, and it is in the place of our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without necessarily killing the goose that might lay the golden eggs," he said.

In delivering his keynote remarks at the CBN/Bankers Committee's Initiative for Economic Growth on Friday, the VP said the position of authorities should be the subject of further reflection.

Emefiele told a Joint Senate Committee this week that the issuance of cryptocurrencies by unregulated and unlicensed entities is contrary to the mandate of the CBN.

He warned that cryptocurrency has been used to facilitate money laundering, payment of ransom for kidnapping, and finance terrorism in different parts of the world.

Emefiele further stressed to the committee that the CBN's primary duty as a regulator is to protect the activities of actors, bank stakeholders, and uninformed actors in the financial system from other actors who may wish to take advantage of them.

The 59-year-old said Nigerians who have nothing to hide should not be worried by the ban.

Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoye, also told lawmakers that virtual assets and cryptocurrencies are risky for implementation in Nigeria.

He said the CBN will be unable to regulate policy around cryptocurrencies because they are issued by private foreign entities.

However, he noted that virtual assets cannot be wished away and that Nigeria's CBN can follow the footsteps of other central banks in considering floating officially-recognised cryptocurrencies.

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