The Central Bank of Nigeria Governor, Godwin Emefiele, has again spoken on the placement of ban on cryptocurrency operation, saying it was in the best interest of depositors and the country’s financial system.
Emefiele disclosed 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.
The CBN governor, in his statement titled ‘Cryptocurrency.’ said: We acted in Nigerians’ best interest.” Emefiele who also described the operations of cryptocurrencies as dangerous and opaque, said the use of cryptocurrency contravened an existing law.
According to him, 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.
He explained that the legitimacy of money and the safety of Nigeria’s financial system was central to the mandate of the CBN. The banking regulator boss noted that cryptocurrency was not legitimate money because it was not created or backed by any central bank.
He said: “Cryptocurrency has no place in our monetary system at this time and cryptocurrency transactions should not be carried out through the Nigerian banking system.”
Recently, Techeconomy.ng reported that the CBN had first spoken about its placement of ban on all forms of cryptocurrencies in the country and why it warned deposit money banks, non-financial institutions, and other financial institutions against their continuity in the business.
The CBN, in a statement issued on Sunday, February 7, explained that it felt the need to provide further justifications about its position to the general public.
The statement read in part: “Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability, and regulation.
“While there are a number of cryptocurrencies now in circulation, Bitcoin was the first to be introduced in 2009, and now accounts for about 68 percent of all cryptocurrencies.”
The CBN made further clarification that its recent restriction is not new, but only a reminder of the earlier circular that was dated January 2017.