Group Faults Ban on Cryptocurrency Transactions

By Emma Okonji

The Blockchain Industry Coordinating Committee of Nigeria (BICCoN) has expressed dissatisfaction over the recent ban of cryptocurrency transactions by the Central Bank of Nigeria (CBN).

The group argued that the action will stifle technology innovation in the country, if not reviewed, while calling on National Assembly members to quickly intervene.

According to the group, the adoption of emerging technologies, financial technology (FinTech), blockchain, cryptocurrency, bitcoin, are driven by technological innovations.

In a recent communique released by the group and signed by its General Secretary, Senator Ihenyen, the group stated: “Innovation is a good thing. When supported by clear standards and expectations, innovation can support the pursuit of public interest objectives such as greater inclusivity and network resilience.

“We have reached the point in the cycle of innovation in payments where it is essential that we set the standards and thus the expectations for how innovation will take effect.”

The group also alleged that since the directive was issued, a number of persons and entities accounts have been closed, and that in one strange and exceptional case, the funds in the two corporate accounts of a cryptocurrency exchange were wiped out and then eventually closed.

According to the communique, “Though as the regulator, the CBN has the statutory authority to delimit banking operations, but ordering banks and other financial institutions to freeze accounts suspected to be in use for cryptocurrency may not be supported by law.

“This is because there is currently no legislation by the National Assembly criminalising or illegalizing trade in cryptocurrency in Nigeria. Therefore, it is questionable whether the CBN has the statutory power to order the freezing of these accounts.”

“Ordinarily, the CBN’s circular, while shocking and disappointing, should have at least stipulated a reasonable period within which affected customers’ accounts should be closed,” the BICCoN further said.

Giving the advantages of cryptocurrency, the group said the crypto industry in Nigeria witnessed growth particularly in the last four years, enabling and expanding access to finance to millions of people across Africa, including Nigeria.

Citing the proposed National Blockchain Adoption Strategy, an initiative of the National Information Technology Development Agency (NITDA), the group said policy and regulation should not stifle innovation.

NITDA, working with the Federal Ministry of Communications and the Digital Economy (FMoCDE) had recently exposed a draft national adoption strategy to all stakeholders.

As communicated by NITDA in November 2020, the Federal Government plans to earn $6 billion from blockchain technology by 2030. We strongly believe that this is achievable. To enable Nigeria achieve this target, we appeal to the CBN to reconsider its cryptocurrency policy, the group said.

It added that a reconsidered approach that does not stifle innovation would help significantly boost the federal government’s policies on diversification of the Nigerian economy, digital economy, and digital transformation, not forgetting the CBN’s financial inclusion policy and target.

The rapid growth of Nigeria’s blockchain and crypto industry is a development that should be studied and understood in line with the desire of the federal government to develop a digital economy and diversify the Nigerian economy, BICCoN further said.

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