Kingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria (CBN) has described the clampdown on cryptocurrency by the country’s apex bank as unnecessary, likening it to a third world war by the CBN on the digital currency
A Professor of International Business and Public Policy, Moghalu said the move by the CBN is reactionary and urged the leadership of the bank to be ahead of the curve.
Professor Moghalu stated this on Monday when featured on an ARISE News programme, The Morning Show.
“In the world today, there is about almost a trillion dollars worth of cryptocurrencies, so it’s a significant form of exchange especially in an age where innovation is becoming faster and faster online.
“So this is worth the big deal and many central banks have never been comfortable with cryptocurrencies, but some central banks despite their discomfort have begun to adapt to it because they recognise the inevitability of innovation. So they focus their minds now on how can we manage this thing, how can we make sure that it does not bring our financial system to ruin,” Professor Moghalu said on ARISE News.
“An that’s the issue with the central bank’s decision, it does appear in the eyes of many people although the central bank clearly has the authority to regulate the currency and financial space, but some people will say this looks a bit reactionary, why wouldn’t the central bank find a way to be ahead of the curve instead of behind the curve.
“I can understand their concerns there are concerns about criminality and fraud but every medium of exchange is subject to criminality and fraud. This is why when I was in the central bank as deputy governor I led the team that introduced the Bank Verification Number, the BVN, it was to act as a unique identifier to improve the security and efficiency of the payment system.
“The central bank too especially in our time, we did have a tendency for innovation ourselves, so I don’t see why there should be some sort of declaration of third world war between the central bank and cryptocurrency.”
Mr Moghalu called for some sort of deep thinking on the part of the Nigerian central bank on how to come up with a regulatory framework that restricts the use of cryptocurrency or subjects it to some sort of surveillance that alerts the central bank if there are serious abuses that can affect financial system stability.
“You have to be able to monitor to see whether there are signs of that coming on and you can stop trading and do other things, but an outright ban of financial institutions from having accounts associated with cryptocurrency exchanges or cryptocurrency trading seems to me wasn’t necessarily the best approach to the problem.
“There is another issue, that is the fact that we are in a depressed economy. A lot of Nigerians are making a living from trading in these cryptocurrencies, many of them young people.
“So there’s an impression created that people in Nigeria make progress, young people especially, they find avenues to be creative and innovative and make progress not because of the government but in spite of it and that’s a bit unfortunate in my view.”
By Abel Ejikeme