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Senate oppose cryptocurrency ban, invites CBN Governor

NEWSMAN, Abuja – Senate has invited the CBN Governor Godwin Emefiele, to explain the recent ban on cryptocurrency trading in Nigeria, as senators opposed an outright ban of the trade.

Senate mandated its Committees on Banking, Insurance and Other Financial Institutions, ICT and Cybercrimes and Capital Market to invite the Governor of the Central Bank of Nigeria, Godwin Emefiele to brief it on the recent ban on cryptocurrency in the country.

The Senate also invited the Director General of the Securities and Exchange Commission (SEC), Lamido Yuguda, to meet with its joint committee on the issue.

It explained that the information that would emanate from the briefings from the two regulatory bodies would assist the Senate to “determine the opportunities and threats of the cryptocurrency on the nation’s economy and security.”

This resolution of the upper chamber was sequel to its consideration of a motion titled: “CBN’s decision to stop Financial Institutions from transacting in Crypto currencies and matters arising therefrom” at plenary.

The motion was sponsored by Senator Istifanus Dung Gyang, (Plateau North) and Senator Adetokumbo Mukhail Abiru, (Lagos East).

Senator Gyang who presented the motion urged his colleagues to note that the CBN has issued a directive stopping all financial institutions from transacting in cryptocurrencies.

He said that the directive of the apex bank was a follow up to its earlier directives in January, 2017 and February 2018 which “forbade banks not to use, hold, trade and/or transact in cryptocurrencies.”

He further informed the Senate that the decision of the CBN was said to have been predicated on the need to safeguard the Nigerian economy from the adverse effects of the cryptocurrency regime which are “unregulated digital or virtual currencies that are issued by anonymous entities and secured by cryptography.”

He observed that cryptography is a “method of encrypting and hiding codes that prevent oversight, accountability and regulation upon which the CBN says its use in Nigeria violates and contravenes existing law as only the CBN is authorized by law to issue legal tender.

Co-sponsor of the motion, Senator Mukhail Adetokumbo Abiru (APC – Lagos East), advanced side-by-side arguments for and against the accommodation of crypto currency transactions in Nigeria’s financial institutions. 

According to him, the economic benefits associated with Crypto currency transactions cannot be eroded by the Central Bank’s ban. 

Abiru said, “In Nigeria in particular, it is also important to underscore the fact that in the last five years, we have had people trading in cryptocurrency to the tune of over $500 million dollars, that’s to tell you how it is gradually gaining traction. 

“Last year in particular, we had over $140 million dollars invested in cryptocurrency. Just like my colleague rightly said, there are challenges that cryptocurrency has also brought to the fore. 

“You have the challenge to the financial system stability on its own, that is why the CBN is concerned; you also have the issues around cyber crime and also terrorism. 

“Now, in particular, we must also mention that last year, during the EndSARS protest – the CBN banned the account of the EndSARS young lads – cryptocurrency was what they resorted to. 

“Clearly, what it is telling us is that, it is good to ban because of the challenges it has also presented. But, honestly, the reality is that banning it doesn’t take it away.”

The lawmaker, added, “In the US, as it is planning to come about the stimulus package of about $1.9 trillion dollars, one of the major investors there, Elon Musk, just recently on Monday put in about $1.5billion of his assets into cryptocurrency. 

“What that has done is that the value of cryptocurrency has been further enhance. Today, I understand it is within the region of about $50,000 (USD) per Bitcoin. 

“Even our Securities and Exchange Commission also agree and recognize cryptocurrency as a financial asset that they need to regulate their framework around.”

The Senate, after considering the motion, “mandated the Committees on Banking, Insurance and Other Financial Institutions; ICT and Cybercrime; and Capital Market to invite the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC) to brief the Committees on the opportunities and threats of the Cryptocurrency on the nation’s economy and security and to report back findings within two weeks.”

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