The body, which represents cryptocurrency and blockchain companies in Nigeria, has joined other players in the cryptocurrency industry to fight the recent Central Bank of Nigeria (CBN) directive against banks. The CBN’s order to keep cryptocurrencies out of the banking system came into effect on May 5. February 2020.
Do not repeat only.
In a statement, the body known as Blockchain Industry Coordinating Committee of Nigeria (BICCON) also rejected the CBN’s claim that the new directive is just a reiteration of what it said in January 2017. The latest directive effectively prohibits financial institutions from providing services to individuals and/or companies trading in cryptocurrencies.
In addition, BICCON contends that CBN failed to properly engage a competent judicial authority or issue an injunction. BICCON also points to the rush and chaotic implementation of the order and how some cryptocurrency companies have been affected by the decision. Biccone explains:
As of February 5, 2021, the accounts of a number of individuals and entities have been closed. In a bizarre and unusual case, funds in two company accounts on a cryptocurrency exchange were removed and eventually closed.
The representative body, however, noted that the ban may face legal challenges as there is currently no legislation in the National Assembly that criminalises or bans cryptocurrency trading in Nigeria.
Senators against CBN directive
Meanwhile, some members of the Nigerian Senate told BICCON media that they disagreed with the CBN directive before the statement was released. The Nigerian Senate reportedly wants the CBN to explain its decision and the governor, Godwin Emefiele, to appear before the legislature.
However, at least one senator, Sani Musa, has come out in favour of the CBN directive. In his statement, Musa said cryptocurrencies, especially BTC, have rendered the Nigerian currency almost worthless. Another regulator, the Nigerian Security and Exchange Commission, also said it supported the CBN directive. The reports quote the regulator as saying:
For the purpose of inclusion in the SEC’s regulatory incubation framework, the assessment of all persons and products covered by the CBN Circular dated February 5, 2021 will be deferred until such persons can open bank accounts in the Nigerian banking system.
The Securities and Exchange Commission (SEC), which has already announced its intention to regulate cryptocurrencies, justifies the apparent need for further analysis and understanding of the risks. However, the regulator denies that there are any contradictions and inconsistencies between what the Securities and Exchange Commission said in September 2020 and its current position on the CBN Directive.
At the same time, BICCON’s statement also addresses some of the false claims about cryptocurrencies that the CBN spread in its follow-up statement. The panel also discusses what Nigeria, which is already the largest cryptocurrency market on the African continent, has to lose if the ban is not revised or lifted.
According to BICCON, Nigeria will miss out on an increase in remittances to the country. Transferring money through cryptocurrencies has proved popular with a growing segment of the Nigerian expatriate community. In addition, the representative body says if the policy is not revised, the country will see the death of Nigeria’s centralized cryptocurrency exchanges, especially local cryptocurrency exchanges that need regulatory support to become globally competitive.
Do you think the CBN will reconsider or revise its position? You can tell us what you think in the comments below.
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