February 25, 2021

Dambela

Dambela Blog

CBN explains why it placed ban on cryptocurrency-related transactions

2 min read

The Central Bank of Nigeria, CBN has explained why it placed ban on cryptocurrency-related transactions in the country.

This was revealed in a statement by apex bank which was released on Sunday February 7. The statement stressed on the fact that cryptocurrencies have become well-suited and convenient for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion.

The statement reads;

“The use of cryptocurrencies in Nigeria are a direct contravention of existing law.

“It is also important to highlight that there is a critical difference between a Central Bank issued Digital Currency and cryptocurrencies. As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities.

“The question that one may need to ask therefore is, why any entity would disguise its transactions if they were legal.

“It is on the basis of this opacity that cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion due to the fact that it is anonymously sent and untraceable.

“Many banks and investors who place a high value on reputation have been turned off from cryptocurrencies because of the damaging effects of the widespread use of cryptocurrencies for illegal activities.

“The role of cryptocurrencies in the purchase of hard and illegal drugs on the darknet website called “Silk Road” is well known. They have also been recent reports that cryptocurrencies have been used to finance terror plots, further damaging its image as a legitimate means of exchange.

“Moreover, repeated and recent evidence now suggests that some cryptocurrency have become more widely used as speculative assets rather than as means of payment, thus explaining the significant volatility and variability in their prices”.

“Furthermore, the CBN would like to assert that our actions are not in any way, shape or form inimical to the development of FinTech or a technology-driven payment system.

“To the contrary, the Nigerian payment system has evolved significantly over the last decade, leapfrogging many of its counterparts in emerging, frontier and advanced economies propelled by reforms driven by the CBN. This is evident from the variety of participants, products, channels, cutting-edge technology in the payments system.

“It is also validated by the astronomical growth of volume/value of transactions and the fact that Nigeria is an investment destination of choice for international financial technology companies because of CBN’s policies that have created an enabling investment environment in the payments system”.

Leave a Reply

Your email address will not be published.

Copyright © All rights reserved. | Newsphere by AF themes.
Translate »
Social Media Auto Publish Powered By : XYZScripts.com