Home ANALYSIS THE BIRD'S EYE EXPLAINER: Eight Points To Note About CBN’s Circular On Cryto Currencies

EXPLAINER: Eight Points To Note About CBN’s Circular On Cryto Currencies

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By Olufemi Fadairo

On Friday, the Central Bank of Nigeria (CBN) through a statement banned Nigerian banks from facilitating cryto currency transactions.

Since then, there have been so many negative reactions by commentators.

Here under are eight points to note about the directive by the CBN:

  1. Digital currency (issued by a country’s central bank) is different from crypto (virtual) currencies.
  2. I don’t know of any central bank IN THE WORLD that supports crypto currency. Digital currencies, yes. Crypto currencies, No!
  3. FCA (Financial Conduct Authority) of UK issued circular against crypto currencies which came into effect in the UK in January of this year 2021
  4. The CBN has not stopped people from trading in bitcoin and other crypto currencies (if they want the risk), all that the CBN has said is that banks should not get involved in the trade.
  5. CBN regulates the banks, she has the responsibilities to protect them. Same way the FCA in the UK protected the UK Financial industry.
  6. Between 2018 and today, no less than 45 countries around the world have OFFICIALLY written circulars against crypto currencies.
  7. As at today, the central banks worldwide are all against crypto (aka virtual) currencies. But as with homosexuality and Marijuana usage, maybe in the near future, crypto currencies would be acceptable by central banks in the world.
  8. The Central bank of Nigeria has done the right thing as of this moment. Positions may shift as things evolve later in the future.

° Fadairo works in the financial services sector as an information security and fraud expert

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