Musa Jimoh, the Deputy Director and Head of Payments System Policy and Oversight at the Central Bank of Nigeria (CBN) has announced the Bank’s intention to develop and eventually deploy its own cryptocurrency, according to a report by The Guardian, a Lagos-based, Nigerian-owned newspaper unaffiliated with the British publication of the same name.
Speaking at a recent cryptocurrency conference in Lagos, he explained the motive behind the decision, relating that the CBN “cannot stop the tide of waves generated by the blockchain technology and its derivatives. Currently, we have taken measures to create four departments in the institution that are looking forward to harmonise the white paper on Crypto currency.”
Until recently, the CBN had reportedly been wary of cryptocurrency because the technology offers “an outlet for personal wealth that is beyond restriction and confiscation,” a feature that is presumably problematic because it can allow bad actors to securely warehouse ill-gotten money.
Conference attendee and Information Security Society of Nigeria president Dr. David Isiawe opined that Nigerians must accept cryptocurrency whether they like it or not.
“We cannot wish this reality away. It is made worse when we realise that we are still grappling with current challenges of e-commerce and other electronic payment systems but technology development and advancements are not waiting … Nigerian[s] must be proactive rather than reactive by considering how these technologies would affect and influence our lifestyles and business operations and channel[s], and thus fashion our rules of engagement for their adoption.”
Also in attendance, the cybersecurity firm Digital Encode’s CTO Oluseyi Akindeinde remarked that, in addition to revolutionizing money, the blockchain offers solutions in other sectors, such as land deed registration and stock trading.
This was not the CBN’s first public statement on cryptocurrency. This past January, it issued a circular to banks and other financial institutions, instructing them, among other things, not to “use, hold, trade, and /or [sic] transact in anyway [sic] in virtual currencies.” The letter closes with the admonition that bitcoin and other cryptocurrencies “are not legal tenders in Nigeria, thus any bank or institution that transacts in such businesses does so at its own risk.”
That same day, Nigeria’s Securities and Exchange Commission issued a notice advising members of the public “to exercise extreme caution with regard to digital (crypto currencies) as a vehicle of investments.”