Central Bank of Nigeria Governor Mr. Godwin Emefiele joined the chorus of bitcoin bulls saying that the CBN acted in the nation’s best interest by ordering local financial institutions to shut down all bank accounts associated with cryptocurrency trading platforms.
Emefiele, who described the operations of cryptocurrencies as dangerous and opaque, said the use of cryptocurrency contravened the law. Furthermore, the fact that unregulated and unlicensed entities issued cryptocurrencies made it contrary to the CBN mandate, as enshrined in the CBN Act (2007) that empowers it as the issuer of legal tender in Nigeria, he added.
Emefiele, while briefing a joint Senate Committee on Banking, Insurance and Other Financial Institutions, ICT and Cybercrimes, and Capital Market, on its directive banning cryptocurrency trading, described the operations of cryptocurrencies as dangerous and opaque.
The Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Nigerian Financial Intelligent Unit (NFIU), which also addressed the joint committee, said cryptocurrency was being used as a channel for funding violence and terrorism in Nigeria.
Describing the operations of cryptocurrencies as dangerous and opaque, the CBN governor said the use of cryptocurrency contravened an existing law. He said given the fact that cryptocurrencies were issued by unregulated and unlicensed entities made it contrary to the mandate of the bank, as enshrined in the CBN Act (2007) declaring the bank as the issuer of legal tender in Nigeria.
Emefiele, who also differentiated between digital currencies which central banks can issue and cryptocurrencies issued by unknown and unregulated entities, stressed that the anonymity, obscurity and concealment of cryptocurrencies made it suitable for those who indulge in illegal activities such as money laundering, terrorism financing, purchase of small arms and light weapons and tax evasion.
“Cryptocurrency has no place in our monetary system at this time and cryptocurrency transactions should not be carried out through the Nigerian banking system,” he added.
While urging that the issue of cryptocurrency be treated with caution, Emefiele, CBN governor assured that the bank would continue its surveillance and deeper understanding of the digital space to protect the nation’s financial system.
Also speaking, the director-general of the Securities and Exchange Commission (SEC) Lamido Yuguda clarified that there was no policy contradiction between the CBN directive and the pronouncements made by the SEC on the subject of cryptocurrencies in Nigeria. He explained that the SEC made its pronouncement at the time to provide regulatory certainty within the digital asset space due to the growing volume of reported flaws.
Similarly, the chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Prof. Bolaji Owasanoye explained that cryptocurrencies posed serious legal and law enforcement risks for Nigeria due to its opaque nature and illicit financial flows, adding that the current move by the Federal Government to link national identification numbers with SIM cards attested to the fact that criminals had relied on the shield provided by anonymity to commit heinous crimes.