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Cryptocurrency

How Senators reacted to CBN’s crypto ban

Nigerian senators have expressed their concerns and dissatisfactions over CBN’s crypto ban.

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Tokunbo-Abiru Group Managing Director, Polaris Bank Limited

Like several industry watchers and Nigerians, some Senators in the National Assembly have expressed their concerns over the decision of the Central Bank of Nigeria (CBN) to ban financial institutions from transacting in crypto currencies.

Below are their views and proffered solutions, which they shared via Twitter, to address the fears of CBN instead of an outright ban:

Senator Solomon Adeola, a Chartered Accountant and Tax Consultant

I am strongly against the outright ban of this medium of exchange by the Central Bank of Nigeria. What the CBN should be telling Nigerians are the regulations put in place to regulate the activities of the operators.

All over the world, these cryptocurrencies are regulated. The operators of this so called currency are everywhere.

I would indulge this Senate to allow the regulators also to be invited so that they can also tell the Committees their own position concerning the operation of cryptocurrency in Nigeria.

READ: Crypto ban: CBN rule does not criminalize cryptocurrencies – Moghalu

Senator Biodun Olujimi, former board member, Nigerian Communication Commission

We didn’t create cryptocurrency and so we cannot kill it and cannot also refuse to ensure it works for us. These children are doing great business with it and they are getting results and Nigeria cannot immune itself from this sort of business.

What we can do is ensure bad people must not use it. This motion is most important to us. The time has come for us to harmonize all the issues concerning cryptocurrency.

READ: Why the CBN wielded the big stick on cryptocurrency transactions

Senator Tokunbo Abiru, immediate past Group Managing Director, Polaris Bank

In the last five years, we have had people changing cryptocurrencies to over $500 million. It is good to ban because of the challenges it has presented; in reality, banning it doesn’t take it away.

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Even our Securities Exchange Commission (SEC) also recognized cryptocurrency as a financial asset they need to regulate. What we should do is to invite the major stakeholders to a public hearing.

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READ: FG to convert N10 trillion “ways and means” loan into 30 year bond – DMO

Senator Sani Musa

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Cryptocurrency has become a worldwide transaction of which you cannot even identify who owns what. The technology is so strong that I don’t see the kind of regulation that we can do. Bitcoin has made our currency almost useless or valueless.

If we have an economy that is very weak and we cannot regulate cryptocurrency in Nigeria, then I don’t know how our economy would be in the next seven years.

READ: Nigeria’s capital inflows hit a new record low of US$9.7bn since 2016

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What you should know

  • On February 5, 2021, the Central Bank of Nigeria warned Deposit Money Banks, Non-Financial Institutions, and other financial institutions against doing business in crypto and other digital assets, according to Nairametrics.
  • In a circular dated 5th February 2021 and distributed to regulated financial firms, the apex bank of Africa’s largest economy warned and reminded local financial institutions against having any transaction in crypto or facilitating payments for crypto exchanges.
  • In addition, the apex bank instructed the financial institutions to immediately close the accounts of such persons or entities transacting in or operating cryptocurrency exchanges.
  • The Apex bank further warned the Nigerian Financial Stakeholders that any breach of this directive would attract serious regulatory sanctions.
  • 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.
  • The Senate has, however, mandated its Committees on Banking, Insurance and other Financial Institution, ICT and Cybercrimes and Capital Market to invite the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele for briefing on the ban of Crypto transactions placed by the apex bank.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Cryptocurrency

World’s most valuable Crypto Exchange, Coinbase ready to go public

US cryptocurrency exchange, Coinbase, today, released an S-1 filing ahead of its direct listing.

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Coinbase

Coinbase the world’s most valuable and largest American cryptocurrency exchange, today released an S-1 filing ahead of its direct listing.

Coinbase massive scale suggests why some crypto pundits are bidding its value up to as much as $100 billion on the private markets.

The fast-rising American crypto exchange financials revealed the crypto startup grew rapidly from 2019 to 2020.

Coinbase was founded was about 9 years ago and allows its customers to buy and sell Crypto Like Bitcoin, Ethereum Polkadot. The fintech company had earlier raised over $540 million in funding as a private company.

In 2019 Coinbase’s net income was $30.4 million against $533.7 million in revenue. Just last year the crypto juggernaut net income rose to $127.5 million against $1.28 billion in revenue.

The unicorn grew just over 139% in 2020, a massive improvement in its 2019 results.

In an IPO filing, Coinbase says “Address not applicable” in the spot companies usually list their headquarters.

In a footnote, it explains “In May 2020, we became a remote-first company. Accordingly, we do not maintain a headquarters.”

As a risk factor, it cites: “The identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins.”

Meanwhile, the company also highlighted in a press release it was offering institutional investors its prime brokerage services.

Institutions across the board are building for a future that is protected from new risks; this includes building a diverse balance sheet that is adequately hedged from the traditional capital markets and monetary debasement.

On the corporate side, use cases for digital assets are expanding rapidly from traditional portfolio management as an investment asset within a diversified portfolio — to accounts receivable/accounts payable, employee payroll, and commerce integration, for example.

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Cryptocurrency

CBN Governor calls Crypto illegal money

The CBN Governor, Godwin Emefiele stated that the Crypto ban was in the best interest of Nigerians.

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The Governor of the Central Bank of Nigeria, Godwin Emefiele has recently defended the apex bank’s decision in excluding cryptocurrencies from Nigeria’s financial ecosystem.

Appearing before a joint Senate Committee on Banking, Insurance and Other Financial Institutions; ICT and Cybercrime, Godwin Emefiele stated that the Crypto ban was in the best interest of Nigerians.

According to a report by an online media outlet, while addressing the Senate committee, Godwin Emefiele remarked,

“Cryptocurrency is not legitimate money. Cryptocurrency has no place in our monetary system at this time and cryptocurrency transactions should not be carried out through the Nigerian banking system.”

READ: CBN crypto ban and its ramifications for Nigerian banks

The head of the apex bank affirmed Nigeria’s central bank resolve in continuing its surveillance and deeper understanding of the crypto ecosystem, buttressing that its major objective remains to educate Africa’s largest economy on emerging financial risks and protect Nigeria’s financial system from the activities of money launderers, currency speculators, and foreign-based fraudsters.

Recall in a press release dated, the 7th of Feberuary 2021, the CBN had explained in detail the motives for its directive to Deposit Money Banks (DMBs) and other financial institutions to desist from transacting in and with entities dealing in cryptocurrencies.

READ: CBN claims no immunity for Emefiele as it fires back at NESG

“Due to the fact that cryptocurrencies are largely speculative, anonymous, and untraceable, they are increasingly being used for money laundering, terrorism financing, and other criminal activities. Small retail and unsophisticated investors also face a high probability of loss due to the high volatility of the investments in recent times.

“In light of these realities and analyses, the CBN has no comfort in cryptocurrencies at this time and will continue to do all within its regulatory powers to educate Nigerians to desist from their use and protect our financial system from the activities of fraudsters,” the CBN stated.

READ: CBN’s Emefiele explains why banks restructured N7.8 trillion loans to customers

What you should know: The CBN, some weeks ago issued a circular prohibiting banks and other financial institutions from carrying out transactions in cryptocurrencies or facilitating payments for crypto exchanges.

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  • The CBN’s directive has since gotten very harsh reactions on social media with many condemning the policy as a deliberate attempt by the government to impoverish young Nigerians who have been able to create wealth for themselves through crypto trading.
  • Interestingly, Nigeria along with other countries ranked as the worst countries to start a career do not wholly accept or legally recognize cryptocurrency and other digital assets.

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