In a statement on Monday, Digital Currency Coalition, said;

“We appreciate the regulatory discussions led by President Bola Tinubu and Dr. Bosun Tijani, the Minister of Communications, Innovation, and Digital Economy, which aligns with DCC’s long-standing call for a structured digital currency ecosystem.

“These discussions were further informed by a key document from the International Monetary Fund (IMF) and Financial Stability Board (FSB) titled ‘IMF-FSB Synthesis Paper: Policies for Crypto-Assets.’

The coalition affirmed its readiness to collaborate with the federal government to develop comprehensive policy and regulatory frameworks that address concerns like financial stability, market integrity, and investor protection, among other risks related to crypto assets.

“Importantly, Digital Currency Coalition has proactively self-regulated and complies with the Financial Action Task Force (FATF) standards for Anti-Money Laundering, including enforcing the travel rule among its members.

“We are committed to identifying and implementing effective anti-money laundering and counter-terrorist financing measures that apply to virtual assets and service providers.

“We believe that a well-regulated digital currencyspace is vital for the economic future of Nigeria and are ready and willing to be part of the journey to regulation, supporting the government under President Tinubu’s leadership.

“We also extend our warmest wishes to the Nigerian Government and delegates participating at the UN General Assembly in New York. We wish the Nigerian delegation fruitful deliberation that benefits the nation and the digital currency ecosystem”, the statement reads.

Dr. Kinsley Obiora, the Deputy Governor for Economic Policy at the CBN, disclosed these reasons during the Business Session of the Fiscal Liquidity Assessment Committee (FLAC) retreat held in Abuja.

According to Obiora, members of the private sector created cryptocurrencies in response to their fear that the CBN’s decision to increase the money supply would result in hyperinflation.

The creators of cryptocurrencies also believed that central banks should not have unrestricted control over money.

Recognizing the potential inflationary impact and the potential erosion of households’ purchasing power, the CBN responded to the positive aspects of this change as many people embraced cryptocurrencies.

Due to dissatisfaction with the behavior of cryptocurrency operators, the CBN took the step of excluding them from the banking system due to concerns about the system’s opacity, which posed a threat to financial stability.

Obiora further explained that when the central bank began responding to the COVID-19 crisis by increasing the money supply, some private-sector individuals believed that this could lead to hyperinflation.

As a response, they created cryptocurrencies to assert that central banks should not have unfettered authority over money.

However, the central banks needed to acknowledge the positive aspect of this change, as cryptocurrencies gained popularity among the public.

Another consequence of the government’s response to COVID-19, as revealed by Obiora, was a rise in the fiscal deficit from 4.7 percent in 2019 to 6.2 percent in 2022.

The CBN Deputy Governor highlighted that the monetary side responded by implementing various policies to address the crisis. However, this led to an increase in the fiscal deficit from 4.7 percent in 2019 to 6.2 percent by 2022.

The Governor credited the boost in the value of CBDC transactions to the use of the e-naira by the Nigerian government when transferring social welfare funds to marginalized groups.

The value of Nigeria’s central bank digital currency (CBDC) transactions increased by 63% to $47.7 million (22 billion), with approximately 13 million e-naira wallets downloaded since October 2022, said Emefiele.

However, the country’s currency in circulation fell from more than $6.9 billion (3.2 trillion) in September 2022 to around $2.2 billion in September 2023. (N1 trillion).

The Central Bank of Nigeria’s (CBN) botched demonetization policy has been blamed for the drop in the value of circulating naira banknotes.

Following the announcement of its plan to circulate newly designed banknotes, Nigerian residents were given a few months to return old 200, 500, and 1,000-naira banknotes.

The perceived short repatriation period, as well as the CBN’s failure to provide sufficient banknotes of the newly designed naira, sparked violent protests and requests for a deadline extension.

According to TechEconomy, after the Nigerian Supreme Court ruled against the demonetization process, the Central Bank of Nigeria (CBN) relented and now says previously demonetized banknotes will remain legal tender until the end of the year.

Despite the CBN’s change of heart, both new and old naira banknotes are said to be in short supply, which some Nigerian commentators believe may explain the sudden increase in the value of e-naira transactions.

On Thursday, TechEconomy reported that the platform was down and wouldn’t be available for users.

In a note sent to customers, the CBN said the eNaira platform is now back and better following the maintenance carried out by our dedicated technical team.

“Once again, we apologize for any inconvenience customers might have experienced while the system was undergoing maintenance.

“We also appreciate all your kind feedback aimed at making the eNaira better with even more possibilities.”

Recall that the CBN has been at the forefront of pushing the eNaira to gather momentum and acceptability by Nigerians through different initiatives.

In a statement obtained by TechEconomy, the apex bank apologized to eNaira users as the platform is currently unavailable.

The statement reads: “We apologize for the current unavailability of eNaira services, which is due to an ongoing improvement maintenance activity.

While we regret any inconvenience customers may experience in the interim, we do appreciate your kind feedback and patience as we all strive to improve the user experience with the eNaira.

According to the CBN, it’s technical team is working hard to complete the enhancement process in the next few hours.
“
We assure you that the eNaira platform will be back online soonest to serve you better. Please bear with us.”

To launch the new partnership, the first 5,000 applicants for the show’s new series will receive $5 in Bitcoin redeemable via the Luno app on Android and iOS.

Applicants must be between the ages of 21 – 40 and registrations close on Sunday 31st July 2022.

Aired on DStv, The Next Titan brings together Nigeria’s most ambitious founders to battle it out through a series of entrepreneurial challenges and elimination rounds.

This will be held over 10 weeks under the guidance of the country’s leading business figures and the winning contestant will secure a grand prize of ₦20,000,000 (USD $47,000) to support their new or existing business idea. Runners-up will be awarded ₦5,000,000 (USD $11,750).

Speaking on the launch of the partnership, Owen Odia, Country Manager for Nigeria at Luno, says,

“Since launching in Nigeria seven years ago, we’ve prided ourselves on empowering millions of people to safely explore the potential of a new and upgraded financial system.

Through our new partnership with The Next Titan, we have a unique opportunity to expand this mission by supporting some of Nigeria’s most innovative minds as they unlock an entirely new range of possibilities for people across the country.”

“Over the last eight years, The Next Titan inspired the entrepreneurial spirit of young people throughout Nigeria and has undoubtedly been one of the leading business reality TV shows. With this in mind, we’re especially proud to support their drive to find the next generation of elite business leaders who can continue to push Nigeria forward.”

Launched in 2013, Luno’s products and services make it safe and easy to buy, store and learn about cryptocurrencies like Bitcoin and Ethereum. To-date, the exchange has enabled over $52bn of crypto to be safely transacted and its customers have stored in excess of $1bn.

Mide Akinlaja, executive producer of The Next Titan, adds “Luno’s partnership with The Next Titan is as a result of both parties’ shared interest of empowering entrepreneurship among Nigerian youths through identifying the best business minds and providing them with the required support that would propel them into successful business personalities.”

“This partnership is a step in the right direction as Luno is working to make crypto easily accessible to everyone most especially young business owners thereby empowering them to be game changers in their businesses.”

“The Luno and The Next Titan partnership will equip the young business owners with a mind shift to be innovative to the unprecedented change and transformation in global payment systems as they revolutionize the way business is done across the world.”

Since the start of 2022, Luno has built on its impressive traction to-date and broke past its 10mn customer milestone in April.

Over 55% of its new customers are based in Africa. This followed its launch in March 2022 of Luno Expeditions – its global, early-stage investment arm supporting the best fintech and crypto/web3 founders.

Digital currencies are currently restricted as banks are not allowed to facilitate any transaction after the Central Bank of Nigeria raised several legitimate concerns bordering on fraud, terrorism financing, money laundering, etc.   

“Cryptocurrencies like Bitcoin or Ethereum are not legal tenders. They are just commodities,” Professor Kareem Adebayo Olatoye, Faculty of Law, Lagos State University, said during a BusinessDay Conference on the “Future of Payments and Fraud” in Lagos. 

Professor Olatoye, while delivering a joint paper titled “The Role of Law in Mitigating Fraud in the Digital Payment System”, said the United States of America understands the volatile nature of digital currency; hence, it’s seen and treated as a commodity. 

He warned that cryptocurrencies pose a serious threat to the economy if adopted as legal tender.

“Cryptocurrency can bring down the economy overnight.”

Professor Olatoye agrees that digital payment is the future of payment, however, highlights some of the vulnerabilities.

“Money laundering, theft of identity, fraud, cybercrimes are all dangers digital payments will pose in the future.” 

On the restrictions posed by the Central Bank of Nigeria on cryptocurrency transactions, Professor Olatoye said effective regulation was sacrosanct. “Mitigating fraud and ensuring cybersecurity is critical.

He said the CBN is coming up with a robust policy framework, adding that the present laws available are not enough to control the level of fraud that will be associated with payments in the future.

During a panel session, Emmanuel Babalola, Chief Executive Officer, Bundle Africa, said the idea behind cryptocurrency was not for it to become a legal tender; it was basically meant to be a vehicle to move values easily.

“Digital currency is just a step away from the evolution of money.”

He explained that instead of buying houses that could be easily demolished, it was easier for people to just use a huge sum of money to buy digital currencies that can be accessed anywhere in the world as long as you have access to your wallet. 

In a note seen by TechEconomy, International Monetary Fund (IMF) said in June 2021 that legal tender status requires a means of payment.

“However, internet access and technology needed to transfer crypto-assets remains scarce in many countries, raising issues about fairness and financial inclusion.” 

“Adoption of cryptocurrency as a national currency is probably not appealing to countries with stable inflation and exchange rates and credible institutions. For countries with less stable economies, a better option could be to use an internationally recognized reserve currency such as the dollar or euro.”

The IMF said some countries may be tempted by the “shortcut” of making crypto legal tender to foster cheaper and more inclusive financial services.

The bottom line is that governments need to be the ones to provide these services and take advantage of new digital forms of money, the note explained.