Osinbajo Blast CBN, Says Cryptocurrency Should Be Regulated, Not Banned (Video)

The vice president of the federation Prof Yemi Osinbanjo blasted the Central Bank of Nigeria (CBN) for its recent ban on cryptocurrencies.

The Vice President disagreed with CBN policy while speaking at the Bankers Committee on Friday, stating that the policy should be subjected to review.

It had been earlier reported that the CBN in its directive, told Deposit Money Banks (DMBs), Other Financial Institutions (OFIs), and Non-Bank Financial Institutions (NBFIs) local financial institutions to stop any transactions in crypto or facilitating payments for crypto exchanges.

The apex bank in the circular signed by Director of Banking Supervision, Bello Hassan, and Director, Payments System Management Department, Musa I Jimoh warned that disobedience to the directive will attract sanctions.

While the central bank claimed to have placed a ban on cryptocurrencies in order to protect Nigeria’s financial system from activities of “fraudsters and speculators,” noting that its directive is in the best interest of Nigerians.

The Vice President However argued that while trying to guard against falling prey to challenges presented by the digital currencies, there is also the need to prevent killing the goose that may lay the golden egg.

In his words: “On the very topical issue of blockchain technology, digital assets, and cryptocurrencies let me say two things. “First is that there is no question that blockchain technology generally and cryptocurrencies, in particular, will in the coming years challenge traditional banking, including reserve banking, in ways that we cannot yet imagine so we need to be prepared for that seismic shift and it may come sooner than later. Already, remittance systems are being challenged. Blockchain technology will provide far cheaper options for the kind of fees being paid today for cross-border transfers.

He added that, “I am sure you are all aware of the challenge that the traditional SWIFT system is facing from new systems like Ripple, which is based on the blockchain distributed ledger technology with its own crypto tokens. There are, of course, a whole range of digital assets spawned daily from blockchain technology.

“Decentralized finance, using smart contracts to create financial instruments, in place of central financial intermediaries such as banks or brokerages is set to challenge traditional finance. The likes of Nexo finance offer instant loans using cryptocurrency as collateral.

“Some reserve banks are investigating issuing their own digital currencies. Clearly the future of money and finance, especially for traditional banking, must be as exciting as it is frightening. But as we have seen in many other sectors, disruption makes room for efficiency and progress.

Osinbajo explained further that, “I 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.

“There is a role for regulation here. 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. 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.

VP calls for robust regulation of cryptocurrency, not prohibition. He also calls for scaling up of govt/private sector interventions because "the task of national devp. requires that we fire on all cylinders, afterall at one stage China was building 1.9m housing units per year." pic.twitter.com/IDdg7NDi9i

— Laolu Akande (@akandeoj) February 26, 2021