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Central Bank of Nigeria (CBN) Governor Godwin Emefiele is of the opinion that Nigerians involved in the trade of cryptocurrencies are speculating. Opinions on them have divided the finance world. Emefiele stated this in an interview with Bloomberg.

“Cryptocurrency or bitcoin is like a gamble, and there is a need for everybody to be very careful. We cannot as a central bank give support to situations, where people risk savings to gamble. ”

What is the CBN doing ?

Emefiele also disclosed that he had asked the bank’s research and policy departments to make recommendations on how to regulate the sector. Regulators in the Nigerian financial sector have sounded several warnings concerning trading in cryptocurrencies. The CBN had in January last year issued a circular warning banks against trading in them, but has held several stakeholder sessions to get a better understanding of the industry

Exchanges in the country howver, have applied stringent Know Your Customer (KYC) and Anti Money Laundering (AML) requirements.

Why are Nigerians interested ? 

The search for quick profits has attracted many Nigerians into trading of cryptocurrencies. The  lack of regulation, both globally and locally has left a loophole for several people to create ponzi schemes guaranteeing quick returns.

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The various cryptocurrency exchanges in the country have witnessing a massive spike in patronage, with some of them suspending the opening of new accounts.

What have other countries done ?

China has taken an extreme position regarding cryptocurrencies. The country has banned its citizens from trading them, and instructed exchanges in the country to shut down. It has also hinted at asking companies involved in bitcoin mining to stop operations.

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South Korea has also instructed exchanges in the country to close accounts opened anonymously. British Prime Minister, Theresa recently sounded a note of warning concerning cryptocurrencies, due to the possibility of them being used for crime. Japan has however embraced them, and licensed several exchanges.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com