NDIC Cautions against Adoption of Crypto Currency in Nigeria

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Umaru Ibrahim

James Emejo in Abuja

The Managing Director/Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, has warned Nigerians to exercise maximum caution in the adoption of crypto currencies as their preferred mode of financial transactions.

He said while various forms of digital currencies currently in operation have their positive and negative attributes, those who patronise them risk losing their savings because the medium is largely unregulated and without the backing or support from the traditional central banks in almost all financial jurisdictions.

He stated this during a courtesy call by the NDIC board and management members on the Speaker of the House of Representatives, Hon. Femi Gbajabiamila, in his office at the National Assembly Complex.

Earlier, Chairman of the board, Mrs. Ronke Sokefun, informed the Speaker that the corporation remained a critical player in the Nigerian financial safety net that had contributed immensely to the growth and stability of the country’s financial stability in the 30 years of its operations, using best practices.

Sokefun added that recently, the NDIC became the first public sector institution in Nigeria to be awarded three International Standard Organisation (ISO) certifications simultaneously by the British Standards Institute (BSI) in view of its result-oriented system, processes and procedures.

In a statement issued by the NDIC Director of Communication and Public Affairs, Mr. Sunday Oluyemi, the chairman of the NDIC board further solicited the assistance of the House in the passage of the NDIC Act Amendment Bill currently before the National Assembly.

Responding, the Speaker commended NDIC on the visit, describing it as a right step towards fostering harmonious working relationship with agencies in the executive arm of government.

On the issue of Crypto currency, he noted that as the world currently exploited ways of mainstreaming its use into the global financial landscape, NDIC and other safety-net participants in the country must not be left behind in the adoption of appropriate regulatory framework to deal with the prevalence of crypto currencies in the global financial space.

Gbajabiamila stressed that only recently, there was a meeting of world leaders in Osaka, Japan, to deliberate on the subject.

Responding to a specific request from the board and management of the corporation, he assured them that the House, under his leadership, would ensure that the most appropriate committee is assigned to handle the oversight functions of the corporation.

Nonetheless, there had been growing speculation in recent times that the Central Bank of Nigeria (CBN) may this year issue operating licences to crypto currency operators in the country.

Essentially, crypto currency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control, creation of additional units, and verify transfer of assets.

It represents an alternative currency which utilises decentralised control as opposed to centralised digital currency and central banking systems.

Public trust in crypto currency has increased significantly with the Google report showing a record four-month high in its public trust and interest.

The Managing Director of the International Monetary Fund (IMF), Christine Lagarde, had recently urged central banks to consider a state-backed crypto currency in order to provide safety nets for citizens’ investment and also take advantage of an evolving financial systems led by technology.

But the CBN had also issued cautionary statement over the adoption of digital currency in the country, at least for now.