NDIC Calls Bitcoins, Block Chain “Ponzi Schemes”


Nairametrics| The Nigeria Deposit Insurance Corporation, NDIC, has cautioned Nigerians against investing their hard earned funds in certain cooperative contributory schemes that had gone beyond their primary mandate of accepting contributions from their members, but rather patronize non-members with the promise of huge returns.

“I wish to emphasise that cooperative societies are established to mobilise savings from their members only. I therefore call on non-members not to patronise them as they are neither licensed as deposit taking financial institutions nor insured by the NDIC,” he said.

The NDIC equated such cooperatives with Ponzis such as Bitcoin and the flailing MMM, whom they once again advised Nigerians against. This warning was sounded by NDIC Managing Director, Umaru Ibrahim, who was represented by Nicolas Ibrahim, the NDIC Controller at Enugu Zonal Office at the ongoing 2007 Enugu International Trade Fair on Thursday, Premium Times reports.

He said that the warning was important, as NDIC cannot salvage funds from such schemes as they were neither authorised by the CBN nor insured by the NDIC.

“I wish to draw attention to emergence of the various Ponzi schemes, popularly called Mavrodi Mundial Movement (MMM) and other forms of digital and block-chain currencies. These ponzi schemes also came in form of virtual currencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin and Onecoin for medium of exchange and web based transactions which are neither authorised by the CBN nor insured by the NDIC,” he said.

It’s surprising hearing this from the NDIC Chairman as he did not clearly differentiate between a ponzi scheme and a crytocurrency, let alone the Block Chain technology. While most Central Banks around the world are circumspect when it comes to cryptocurrency, they have not referred to it has a ponzi scheme. Block Chain technology on the other hand, is also widely acknowledged as the new frontier in financial record keeping with some of the major banks around the world investing billions in harnessing its capabilities.

It appears Nigerian regulators are perhaps not well informed about cryptocurrencies and block chain technology.

Chacha Wabara

Chacha Wabara is a legal practitioner, blogger and fitness coach. She has over 5 years experience in blogging and freelance writing. She has written several articles and research work over the years as a freelance contributor. She joins Nairametrics as Our News and Analysis Lead.

What others say about : NDIC Calls Bitcoins, Block Chain “Ponzi Schemes”..


babaztee

This is the height of ignorance. Having access to an open, transparent ledger of bank and other financial transactions as provided by the Blockchain technology, would also be useful for regulators, and it could help governments tackle tax fraud and corruption.

YOJU

its quite a shame, in a situation where financial technology is rapidly taking over the financial sector and cryptocurrency is still referred to as a ponzi scheme, can this people be enlightened please

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