This restriction made some Nigerians looked for a way to circumnavigate the restrictions set by financial institutions..
Nigeria’s vice president Yemi Osinbajo Friday called for the regulation of cryptocurrencies in the country, as against the prohibition of digital currencies.
“There is a role for regulation here,” Osinbajo said at the Bankers Committee Vanguard in Lagos State.
“And it is in the place of both our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs.
“So it should be thoughtful and knowledge-based regulation, not prohibition,” he added.
The vice president is reacting to the recent clampdown on cryptocurrencies by the Central Bank of Nigeria.
CBN ordered commercial banks and other financial institutions to close down accounts associated with cryptocurrencies. The apex later clarified that the order was not a new order, but a reminder of a directive published in 2017.
In response, banks quickly cut ties with cryptocurrency companies, such as the Binance exchange and social payments app Bundle, which in turn stopped accepting deposits.
Since July 2020, Nigerian banks have reduced the amount customers can spend abroad using debit cards as Nigeria’s economy continued to face dollar shortages due to the sharp fall in oil prices. As of now, banks limit customers to withdraw less than $100.
This restriction made some Nigerians looked for a way to circumnavigate the restrictions set by financial institutions, hence, taking advantage of the digital currencies for their transactions.
Nigeria has since become the world’s second-largest Bitcoin market after the United States, Quartz Africa said in a December report.
Although, Osinbajo said he “fully appreciate the strong position of the CBN, SEC, and some of the anti-corruption agencies on the possible abuses of cryptocurrencies and their other well-articulated concerns, but I believe that their position should be the subject of further reflection.”
He said regulatory bodies must “act with knowledge and not fear” as the digital currencies disruption will only make “room for efficiency and progress.”
“The point I am making is that some of the exciting developments we see call for prudence and care in adopting them, but we must act with knowledge and not fear,” he said.