…. Fasua Sides With Traditional Banking
By Dayo Omoogun
The Central Bank of Nigeria has directed all banking and financial institutions to close all accounts dealing in Cryptocurrency forthwith.
In a letter dated February 5, 2021 and addressed to Deposit Money Banks(DMBs), Non- Bank Financial Institutions (NBFIs) and Other Financial Institutions (OFIs), the Apex bank stated “Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in Cryptocurrencies or facilitating payments for Cryptocurrency exchanges is prohibited.
“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or other entities transacting in or operating Cryptocurrency exchanges within their systems and ensure that such accounts are shut down immediately.
With a stern note of finality, it added ” Please note that breaches of this directive will attract severe regulatory sanctions.
This order from the CBN has generated a lot of reactions from all cross sections of the country with many calling out the Bank and some actually calling for a rescission of the decision.
One of the notable Nigerians who has condemned the move is former Vice-President Alhaji Atiku Abubakar.“The number one challenge facing Nigeria is youth unemployment. In fact, it is not a challenge, it is an emergency. It affects our economy, and is exacerbating insecurity in the nation.
“What Nigeria needs now, perhaps more than ever, are jobs and an opening up of our economy, especially after today’s report by the National Bureau of Statistics indicated that foreign capital inflow into Nigeria is at a four year low, having plummeted from $23.9 billion in 2019, to just $9.68 billion in 2020.
“Already, the nation suffered severe economic losses from the border closure, and the effects of the COVID-19 pandemic.
“This is definitely the wrong time to introduce policies that will restrict the inflow of capital into Nigeria, and I urge that the policy to prohibit the dealing and transaction of cryptocurrencies be revisited.”
Atiku added, “It is possible to regulate the sub sector and prevent any abuse that may be inimical to national security. That may be a better option, than an outright shutdown.
“There is already immense economic pressure on our youths. It must be the job of the government, therefore, to reduce that pressure, rather than adding to it.
“We must create jobs in Nigeria. We must expand the economy. We must remove every impediment towards investments. We owe the Nigerian people that much.”
Toeing the same line, Blockchain Alliance, a Nigerian Cryptocurrency group says “The Central Bank of Nigeria(CBN) should reverse its ban of cyrptocurrency and instead support ongoing efforts by the Security and Exchange Commission(SEC) to create a regulatory framework.
The alliance described the action as ” a demonstration of ignorance of how block chain technology works, how no country can stop it and how great nations of the world are already falling on each other to embrace it.
” The value of just one Cryptocurrency exchange exceeds entire value of Nigerian Stock Exchange. This is a multi-trillion industry that transcends national governments. We suspect somewhere some fifth columnists from within the administration may be scheming to sabotage the Buhari Presidency which has been very adaptive to new ideas and innovations. The necessary duration of therapy for patients withpanicdisorder responding to XANAX is unknown. After a period of extended freedom from panic attacks, a carefully supervised tapered discont in uation may be attempted. However, https://thevantasticlife.com/order-alprazolam-online/ there is evidence that this may often be difficult to achieve without recurrence of symptoms and/or the manifestation of withdrawal syndrome.
“Let us repeat that bitcoin cannot be banned by any country because the block chain technology behind it is used in a decentralized way so that no single person or group has control—rather, all users collectively retain control. Decentralized blockchains are immutable”, the group affirmed.
Dr.Tope Fasua, outstanding Economist and public analyst raises the issues of concern which tend to pitch conservatives and traditional banking authorities against the new trends.
These according to him include: “The anonymity it provides is a haven for criminality. What drives prices and is there any opportunity for abuse? If there is no regulator are a few people likely to take advantage? What causes volatility in prices?What happens when a coiner dies? This is very important in this age of a thousand deaths.How exactly are coins mined and who has ability to mine? Do we in these parts have the electric power and computing capability and speed to mine? Does that not skew the market already? ”
“Crypto in my view is not ready for the all-out war globally. Global acceptance by the traditional economy is going to take a lot of time e.g. for farmers or market women to accept crypto. If it started as a rebellion (which is the case), then you must think of the incentive for the global economy to sign on to that rebellion with you against the devil they know”, Fasua reckons.
“The last issue I can address today has to do with the propensity for fraud. In all the analysis I have seen from crypto traders, trainers and enthusiasts in the last two days, they have always mentioned that many fraudsters are in the system. One of them mentioned that Telegram is crawling with fraudsters who have made away with people’s money even before the CBN circular.
“The bankers know that they are done if cryptocurrencies really take off and replaces traditional currencies. Quite a number of them have invested in cryptos just to hedge their bet. But the traditional financial system is deeply rooted, organized, and backed by government. Cryptos are not. Till date, only 5 countries have issued their own cryptocurrencies namely China, Ecuador, Senegal, Tunisia and Singapore.
On the issue of exchangeability, Fasua wonders how this will be achieved across the gamut of coins in the marketplace and quips “Maybe as some have suggested and as is already happening, the big players like big banks will hijack the whole concept, and ram it all back into traditional banking or offer it as option. I have also seen that some guaranteed cryptos exist, tied to assets or existing currencies. Does that not defeat the purpose? The answer my friend, is blowing in the wind.
Dr. Oby Ezekwesili, also an Economist of repute who has distinguished herself at home and abroad, as if in anticipation of some of the issues raised by Dr. Fasua had this to say via tweeter earlier on Saturday, “Frankly, CBN, all you needed to do was map all the legitimate risks associated with #cryptocurrency and gather a subset of the super brilliant Nigerian young minds in #FinTech so you listen and learn more. Learning is the greatest asset of the policy-maker. Never late.
She believes the directive casts Nigeria as unready for a digitized future.
“Our country’s DNA for irony is uncanny. At the same moment, as we celebrate one of our own leading a global trade institution, we have a memo from our Central Bank making country appear unprepared to embrace the future”, Ezekwesili queried.