CBN, SEC Anchor Cryptocurrency Ban On Financial System Protection

The Central Bank of Nigeria Governor, Mr Godwin Emefiele, says the bank’s decision to prohibit deposit money banks, non-banking institutions and other financial institutions from facilitating trading and dealings in cryptocurrency was in the best interest of Nigerian depositors and the country’s financial system.

Emefiele states this while briefing a joint Senate Committee on Banking, Insurance and Other Financial Institutions; ICT and Cybercrime; and Capital Market, on its directive to institutions under its regulation.

These were according to a statement from CBN titled ‘Cryptocurrency: We acted in Nigerians’ best interest – Emefiele’.

Describing the operations of cryptocurrencies as dangerous and opaque, the CBN governor maintains that the use of cryptocurrency contravened an existing law.

He pointed 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 could 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.

Citing instances of investigated criminal activities that had been linked to cryptocurrencies, he stated that the legitimacy of money and the safety of Nigeria’s financial system is central to the mandate of the CBN.

Declaring that cryptocurrency is not legitimate money because it is not created or backed by any central bank.

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