The Central Bank of Nigeria (CBN) has said that unlike it is being touted in some media quarters, they are not against financial innovations. However, it said that such innovations should propel e-payment system growth in the country.
Due to its strict warnings against the use of cryptocurrencies, some media sources have labelled the CBN as being against technological financial innovations. However, while speaking at a breakfast meeting on virtual currencies organized by the Chartered Institute of Bankers in Lagos, Director, Banking and Payments System, CBN, Mr. Dipo Faitokun emphasized the need for the CBN to examine the proposed usage of any innovation and put necessary guidelines in place for its success.
He also more importantly, explained why they cannot regulate bitcoins.
“It’s the subject in town now: Bitcoin, cryptocurrency and blockchain. The Central Bank of Nigeria cannot regulate bitcoin, blockchain. Just the same way no one is going to regulate or control the Internet; we don’t own it.
“The CBN is interested in this technology called blockchain. And what we have said is that we want to identify the various use cases in which we can deploy the technology to do our business; that all the operators within the financial sector can use to conduct their business because it engenders strong benefit.”
“But a lot of people misinterpreted it that we wanted to stop bitcoin. Bitcoin is not an invention of 2015 or 2012; it’s not even an invention of 2010. So, I need to clear that we are not here to stop the bitcoin usage but we are just throwing caution to Nigerians, just the same way we did when the MMM was introduced in the country.”
Bitcoin prices have risen to as high as $1,200 in the last two weeks, out performing all asset classes around the world. The rise is attributed to bullish expectations that financial regulators such as in the US or China may approve Bitcoin exchanges. Investors in cryptocurrencies ironically look forward to cryptocurrency regulations as it will be considered a clear sign that it is now a recognizable asset class, thus opening it to more institutional investors. The more demand for bitcoins, especially with the trillions of dollars managed by regulators institutional investors, the more likely it is for bitcoin prices to rise.