…says SEC recognises digital money operations in Nigeria
A former deputy governor of the Central Bank of Nigeria, Dr. Kingsley Moghalu, says the ban placed on Deposit Money Banks in the country from trading in cryptocurrencies has left so much to be desired.
Moghalu, who was the presidential standard bearer of the Young Progressives Party during the 2019 general elections, said the Securities and Exchange Commission recognises cryptocurrencies as financial assets.
SEC is the main regulatory institution of the Nigerian capital market and it is supervised by the Federal Ministry of Finance.
Moghalu stated this while speaking as a guest on Arise TV’s ‘The Morning Show’ on Monday.
“There is a regulatory dysfunction, there is lack of regulatory coordination. The Securities and Exchange Commission recognises cryptocurrency as a financial asset and in September last year, they said they will be issuing a regulatory framework for it. So, it does look as if the right-hand does not know what the left hand is doing,” he said.
CBN had on Sunday said in a statement that cryptocurrencies promote illegal activities and raise risks, among other reasons.
But the former CBN deputy governor argued that there was no means of exchange immune from risks, adding that if the apex bank could manage the risks of paper currency and electronic payments and other means of exchange, it should have no difficulties checking the risks associated with digital platforms such as cryptocurrencies.
Moghalu said, “I can understand their (CBN) concern –criminality and fraud, but every medium of exchange is subject to fraud and criminality. This was why when I was in the Central Bank, I led the team that introduced the Bank Verification Number. It was to act as a unique identifier to improve the security and efficiency of the payment system.
“So, I don’t see why there should be the declaration of the sort of Third World War between the CBN and cryptocurrencies.”
The YPP presidential candidate also stated that some central banks across the world were already adapting to cryptocurrency transactions having recognised the inevitability of innovation.
Moghalu, therefore, urged the apex bank to come up with the regulatory framework to monitor cryptocurrency transactions rather than preventing financial institutions from having anything to do with it.
He said, “I would have preferred some deep thinking about some regulatory framework that restricts the use of cryptocurrency or subject it to some sort of surveillance that alerts the Central Bank if there are serious abuses that can affect the financial system stability.
“The bank has to be worried about the stability of our financial system and that is what its concern is. You have to be able to monitor to see whether the signs are coming up and you can stop trading or do other things.
“But an outright ban of financial institutions from having accounts associated with cryptocurrency exchanges or cryptocurrency trading wasn’t necessarily the best approach to the problem. That is what I think even though I understand why they have done it.”
Inspite of the scathing criticisms that have trailed the CBN ban on cryptocurrency transaction, some Nigerians, including ex-presidential aspirant, Adamu Garba, have, however, commended the apex bank’s action.
According to them, it would help the country’s counter-terrorism fight as the measure would block the sources of funding for terror groups like Boko Haram, which had been receiving funding from external sponsors through cryptocurrencies.
Moghalu, however, enjoined the CBN to strive to fish out the sponsors of Boko Haram and other non-state actors.
He said, “During the #EndSARS movement, Bitcoin and other cryptocurrencies were used to support the peaceful protests when the Central Bank started restricting access to account of people who supported the protest, which was a move I did not support. I’m not sure it is the business of the Central Bank to clamp down on peaceful protesters in the name of national security.
“If we are so concerned about counter-terrorism and terrorism financing, perhaps, it (CBN) should place a lot of efforts in finding the financiers of Boko Haram which is killing people in the North-East of the country. We have the tendency in Nigeria to be focused on the wrong things and to be chasing shadows.”