AVice-President Yemi Osinbajo has kicked against the ban on cryptocurrency, saying financial authorities should have strengthened regulation and not prohibit cryptocurrency transactions.
Citing irregularities, the Central Bank of Nigeria (CBN) had directed banks to halt cryptocurrency transactions.
But speaking at a one-day economic summit organized by the CBN, the Banker’s Committee, and the Vanguard Newspaper, the nation’s number two citizen opposed a policy that prohibits cryptocurrency operations in the banking sector, saying: “We must act with knowledge and not fear.”
“I fully appreciate the strong position of the CBN, Securities and Exchange Commission (SEC) and some of the anti-corruption agencies on the possible abuses of cryptocurrencies and their other well-articulated concerns. But I believe that their position should be the subject of further reflection.
“There is a role for regulation here. And it is in the place of both our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs.
“So it should be thoughtful and knowledge-based regulation not prohibition. The point I am making is that some of the exciting developments we see call for prudence and care in adopting them, but we must act with knowledge and not fear.”
Cryptocurrency will challenge traditional banking
Emphasizing the need for monetary authorities to rethink their stand on cryptocurrencies, Prof. Osinbajo said “there is no question that blockchain technology generally and cryptocurrencies, in particular, will in the coming years challenge traditional banking, including reserve (Central) banking, in ways that we cannot yet imagine. So, we need to be prepared for that seismic shift. And it may come sooner than later.”
His words: “Already remittance systems are being challenged. Blockchain technology will provide far cheaper options to the kind of fees being paid today for cross-border transfers. I am sure you are all aware of the challenge that the traditional SWIFT system is facing from new systems like Ripple which is based on the blockchain distributed ledger technology with its own crypto tokens.
“There are, of course, a whole range of digital assets spawned daily from block-chain technology. Decentralized finance, using smart contracts to create financial instruments, in place of central financial intermediaries such as banks or brokerages is set to challenge traditional finance. The likes of Nexo finance offer instant loans using cryptocurrency as collateral. Some reserve banks are investigating issuing their own digital currencies.”
We can’t afford pilot projects
Talking about the task of national development and the public and private sector interventions, the Vice President emphasized that “in order to engender sustained economic growth, we must think in terms of scale”.
“I am quite concerned when I hear that national interventions are classified as pilots involving sometimes no more than 1000 people. Given the size of our population, we cannot afford the luxury of pilot projects. We should design our interventions very carefully and then go big.
“It was quite puzzling to me when people said that our plan to build 300,000 houses under the ESP was too ambitious a target. After all, this just amounts to 400 houses per local government yet many of our local governments are larger than some African countries who would not consider building 400 houses in one year as too onerous a task.
“The task of national development requires that we fire on all cylinders after all, at one stage, China was building 1.9m housing units per year over a number of years.”
Participants at the forum were the Governor of Lagos State, Mr Babajide Sanwo-Olu; Governor of the Central Bank of Nigeria, Mr Godwin Emefiele; representatives of, the Minister of Finance, Budget and National Planning; the Founder of Vanguard Newspaper, several banking executives, among others.
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