Financial sector stakeholders have called for a regulatory framework for blockchain and cryptocurrency transactions in Nigeria.
They made the call Tuesday in Abuja, at a blockchain/cryptocurrency policy conference hosted by the National Chamber Policy Center (NCPC) of the Abuja Chamber of Commerce and Industry (ACCI).
In February 2021, the Central Bank of Nigeria (CBN) directed banks to close accounts of persons or entities involved in cryptocurrency transactions.
Last month, CBN also penalized banks for flouting the cryptocurrency directive.
Speaking at the event, Olawale Rasheed, CEO of NCPC, said that despite the ban, Nigeria remains one of the top destinations for cryptocurrency trading with values increasing on a quarterly basis.
He said regulatory action was needed to reap the benefits and contain observable negative exposure in the sector.
Rasheed pointed out that nations except China are not banning but creating structures to accommodate the crypto industry that is now nearly two trillion dollars worldwide.
“The NCPC is therefore convinced that the perceived ill of cryptocurrency should create a sense of urgency for the state to regulate rather than shut down or shut down the sector,” Rasheed said.
Also speaking, Uche Uwalaka, president of the Nigerian Association of Capital Market Scholars, expressed concern that there is currently no law specifically targeting cryptocurrencies or crypto assets.
He said that there is an identity crisis regarding the treatment of virtual currencies and assets in Nigeria.
“This partly explains why the CBN and the Securities and Exchange Commission appear to be asserting overlapping jurisdiction for market participants transacting in virtual currencies or other digital assets,” Uwalaka said.
He said that existing financial regulations were inadequate to monitor and guide cryptocurrency activity in the financial system.
Uwalaka said they are also insufficient to protect the financial system from key risks such as fraud, money laundering and the irreversibility of erroneous transactions.
“The government should do more to support blockchain innovation and adoption by supporting public sector adoption, creating a flexible regulatory environment to allow for experimentation and use of specific regulatory application,” he said.
He noted that cross-jurisdictional cooperation and government-industry collaboration were essential in developing a blockchain and cryptocurrency policy for Nigeria.
For his part, Abdul-Rasheed Na’ Allah, vice-chancellor of the University of Abuja, said there was a need to educate Nigerians more about the issues of cryptocurrencies.
Na’ Allah, who was represented by James Adefiranye, deputy director of the Center for Entrepreneurship Studies at the University of Abuja, said it was important to ensure cryptocurrency end-users were protected.
“An average Nigerian today is extremely gullible and that has really exposed a lot of people to being easily defrauded,” he said.
“For this to really be a success in Nigeria, we have to start by looking at Nigeria itself. We need to look at the people who understand blockchain, the technology and the issues of cryptocurrencies to know how they work.
“They need to know the various channels and avenues through which fraudsters could take advantage of their zeal to make money, and that’s basic.”
For Toye Soladoye, chief technology officer at Union Bank, there should be basic policies that help regulate cryptocurrency providers in Nigeria.
He said that the outright ban will cost Nigeria dearly, being a leader in the cryptocurrency space.
He added that regulation was important to control irregularities and emphasized the importance of harnessing the potential of cryptocurrencies in conjunction with blockchain technology.