FG may roll back crypto ban to promote blockchain policy

[ad_1]

Economic and blockchain experts have said that the federal government may soon lift its ban on cryptocurrency following its recently announced blockchain policy.

According to the recently approved National Blockchain Policy, the Nigerian government recognizes cryptocurrency as one of the components that will catalyze the adoption of blockchain technology.

Therefore, the Nigerian government, through this policy, provides a framework for the use of cryptocurrencies, among others, which can help mitigate risks such as money laundering and fraud. This can help build trust in cryptocurrency and make it more accessible to businesses and individuals in Nigeria.

This is despite a ban by the Central Bank of Nigeria in 2021 on crypto transactions.

According to the apex bank, crypto-assets are used for illegal activities including money laundering, terrorist financing, purchase of small arms and light weapons, and tax evasion.

However, stakeholders who spoke with The PUNCH expected CBN to change its stance and lift the crypto ban due to blockchain politics.

Commenting on the matter, the Senior Partner and Head of Blockchain and Virtual Assets Practice at Infusion Lawyers, Senator Ihenyen said that despite CBN’s stance, cryptocurrencies are not illegal in Nigeria since the National Assembly had passed no law to illegalize or criminalize digital assets.

He noted that crypto stakeholders expect the CBN and other relevant agencies to take advantage of the federal government’s National Blockchain Policy to resolve frictions it has had with the industry.

Ihenyen, who is also the former President of Stakeholders in Blockchain Technology Association of Nigeria, noted that the CBN ban/restriction of cryptocurrency-related transactions in Nigeria’s banking and finance sector was understandable, given the risk money laundering, terrorist financing and other illicit activities. transactions, but the ban should be lifted.

This is where the Money Laundering Act 2022 comes in. Under the new law, VASPs are considered financial institutions for AML/CFT compliance purposes. The NFIU is able to provide monitoring and supervision. Banks and other financial institutions are no strangers to AML/CFT compliance either.

Indeed, this was the same stance taken by the CBN in its previous letter to regulated entities when directing them to ensure adequate KYC for crypto-related entities. This is in line with global best practice, including the standards recommended by the Financial Action Task Force. With effective multi-stakeholder engagement and collaboration, Nigeria can succeed.

Ihenyen argued that the policy would create a stronger platform for public-private sector collaborations, which would help open the window of opportunity for blockchain development, capacity building and mass adoption.

According to the Managing Director of BAA Consult, Dr. Biodun Adedipe, the policy is welcome, given that blockchain is the underlying technology for cryptocurrencies and many other contemporary technological activities.

He said cryptos are just one of the uses blockchain technology can be used for. Bitcoin is fundamental for fintech and the digital economy to simplify, scale and facilitate transactions and the performance of economic activities in general. Its relevance goes far beyond the payment system for which it is popular now.

In my opinion, the question is not to prohibit or not; it’s about having a strong regulatory framework and standards for dealing with, reporting and supervising cryptocurrencies that are fundamental to the decision on what to do. It is the prerequisite and it is indeed the future.

For his part, an economist and chairman of the Foundation for Economic Research and Training, Professor Akpan Ekpo, noted that the blockchain policy was not well thought out, hence the discrepancies between the ban and the proposed regulations.

He said there was a need for coordination between the necessary arms of government involved in blockchain and cryptocurrency regulation.

[ad_2]