Economic and blockchain experts have stated that the Federal Government may soon lift its ban on cryptocurrency following its recently announced blockchain policy.
According to the newly approved National Blockchain Policy, “The Nigerian Government recognises cryptocurrency as one of the components that will catalyse the adoption of blockchain technology.
“Hence, the Nigerian Government, through this policy, provides a framework for the use of cryptocurrencies, among others, which can help to mitigate risks such as money laundering and fraud. This can help to build trust in cryptocurrency and make it more accessible to businesses and individuals in Nigeria.”
This is despite a 2021 Central Bank of Nigeria ban on crypto transactions.
According to the apex bank, crypto assets are used for illegal activities, including money laundering, terrorism financing, the purchase of small arms and light weapons, and tax evasion.
However, stakeholders who spoke with The PUNCH expected CBN to change its stance and lift the ban on crypto because of the blockchain policy.
Commenting on the issue, the Lead Partner and Head of Blockchain and Virtual Asset Practice at Infusion Lawyers, Senator Ihenyen, stated that despite the CBN’s stance, cryptocurrencies were not illegal in Nigeria since the National Assembly had not passed any law to illegalise or criminalise the digital assets.
He noted that crypto stakeholders expect the CBN and other relevant agencies to take advantage of the Federal Government’s National Blockchain Policy to fix the frictions it had with the sector.
Ihenyen who is also the former president of Stakeholders in Blockchain Technology Association of Nigeria, noted that the CBN ban/restriction of cryptocurrency-related transactions in Nigeria’s banking and financial sector was understandable, considering the risk of money laundering, terrorism financing, and other illicit transactions, but the ban should be lifted.
“This is where the Money Laundering Act, 2022, comes in. In the new law, VASPs are considered financial institutions for the purpose of AML/CFT compliance. The NFIU is capable of ensuring monitoring and supervision. Banks and other financial institutions are not also strangers to AML/CFT compliance.
“Indeed, this was the same position taken by the CBN in its previous letter to regulated entities when it directed them to ensure adequate KYC for crypto-related entities. This is consistent with global best practices, including standards recommended by the Financial Action Task Force. With effective multi-stakeholder engagement and collaboration, Nigeria can get this right.”
Ihenyen argued that the policy would create a more robust platform for public and private sector collaborations, which will help open the window of opportunities for blockchain development, capacity building, and mass adoption.
According to the Chief Executive Officer of BAA Consult, Dr Biodun Adedipe, the policy is a welcome one, given that blockchain is the underlying technology for cryptocurrencies and many other contemporary tech-levered activities.
He said, “Cryptos are only one of the uses to which blockchain technology can be put. Bitcoin is fundamental to fintech and the digital economy to simplify, scale, and make convenient transacting and carrying out economic activities in general. Its relevance is far beyond the payment system for which it is popular now.
“In my view, the issue is not about banning or not; it is about having a robust regulatory framework and standards for dealing in, reporting, and supervising cryptocurrencies that are fundamental to the decision on what to do. That is the precondition and that indeed, is the future.”
On his part, an economist and the Chairman of the Foundation for Economic Research and Training, Prof Akpan Ekpo, noted that the blockchain policy was not well thought through, hence, the discrepancies between the ban and the proposed regulation.
He stated that there was a need for coordination among the necessary arms of government involved in blockchain and cryptocurrency regulation.