A former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has said that $500 million worth of Bitcoin has been traded in Nigeria within the last 5 years.
This is as the former Presidential Candidate, who was once in charge of the financial systems directorate at the CBN said that many Nigerians trade in these cryptocurrencies because it protects them from the fluctuations in the value of the naira.
This was disclosed by Moghalu during an interview on a Channels Television programme, Sunday Politics while reacting to the recent CBN policy which directed all deposit money banks and other financial institutions to close accounts that transact in cryptocurrency.
He faulted the move of the apex bank, saying that regardless of the risks involved in trading in cryptocurrencies, he would not recommend an outright ban.
Moghalu during the interview said, “A lot of the activities in the world are going digital and I would not recommend banning it (cryptocurrencies) outright.
“$500 million worth of Bitcoin has been traded in Nigeria within the last five years and Nigeria is one of the top 10 countries in the use of cryptocurrencies in the world today”.
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‘’Also, one of the things that attract Nigerians a lot to cryptocurrencies is because the Central Bank and I have said this you know a lot of the policy-making that has come out of the bank in recent years have been ad hoc, changes from today to tomorrow and so on, policies concerning remittances, policies concerning foreign exchanges and so on and so forth.
‘’But trading in these cryptocurrencies for many people protects them from fluctuations in the value of the naira because every fiat money, every currency in the world over time depreciates in value because of inflation and this is one of the reasons people go for cryptocurrencies.’’
While explaining that crypto is becoming a real factor in the country’s investment ecosystem, as well as a source of livelihood for many Nigerians, he supported the sentiments of many other Nigerians, noting that the move is seen as though the government is always taking actions aimed at taking away opportunities from Nigerians especially in a depressed economy.
Moghalu said that he believes that any investment has risks and if he was in a position to make a decision, it would be to balance the risks as against the current realities of the country.
He said, “The Nigerian Government should try to make the investment climate far more friendly and efficient than it is now. It is unfriendly, that’s why the foreign investment is declining.’’
It can be recalled that the CBN had earlier directed deposit money banks and other financial institutions to immediately close the accounts of such persons or entities transacting in or operating cryptocurrency exchanges, warning of severe regulatory sanctions in the event of any breach of the directive.
The order was contained in a circular to banks and other financial institutions, signed by the Director of Banking Supervision, Bello Hassan, and was expected to take effect immediately.
The CBN action has provoked some reactions from Nigerians, many of whom have faulted the apex bank’s directive, saying that there is no logical reason to prohibit crypto enabled transactions and that it runs contrary to the present administration’s promise to lift 100 million Nigerians out of poverty.
The CBN released a press statement further justifying its position to the general public and clearly stating that cryptos are issued by unregulated and unlicensed entities which begs the question of legality. It also claimed that cryptocurrencies have been used to finance several illegal activities including terrorism and money laundering.