Cryptocurrency: Senate invites CBN Gov, DG SEC to explain opportunities, threat to economy

Tunde Opalana and Kamarudeen Ogundele, Abuja

The Senate on Thursday summoned the Governor of the Central Bank of Nigeria (CBN), Dr Godwin Emefiele and Director General of Securities and Exchange Commission (SEC), Lamido Yuguda, over the ban on cryptocurrency.

The CBN while explaining why it banned cryptocurrency-related transactions in the country, had claimed the digital currency was being used for money laundering and terrorism.

The decision has sparked outburst from mostly young people in a country that is the world’s second-biggest user of virtual currencies like Bitcoins.

The apex bank had said cryptocurrencies had become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion.

The upper chamber mandated its committees on Banking, Insurance and Other Financial Institutions, Information and Communication Technology, Cybercrime and Capital Market to invite, to invite the duo to explain the opportunities and threat of the digital payment platform on Nigeria’s economy and security.

This resolution followed the debate of a motion titled, “CBN’s decision to stop Financial Institutions from transaction in Crypto currencies and Matters arising therefrom,’ co- sponsored by Senators Istifanus Gyan (Plateau North) and Adetokunbo Abiru (Lagos East).

The motion, according to the sponsors was borne out of the recent CBN directive stopping all financial institutions from transacting in the digital currency platform which is a follow up to its earlier directives in January 2017 and February 2018 forbidding banks not to use, hold, trade or transact in Cryptocurrencies.

The sponsors noted that the action and directives of the CBN had attracted sharp reactions from Nigerians and had become a topical subject of national discuss.

The Senate noted 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 crypto currency regime which are unregulated digital or virtual currencies that are issued by anonymous entities and secured by cryptography.

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

The Senate raised concerns that crypto currency by nature was anchored in anonymity, obscurity and concealment of its patrons and actors making it difficult if not impossible to trace, track and uncover those that may deploy it for ignoble and illegal usage such as money laundering, terrorism, financing, drug purchase, Cybercrime etc.

READ ALSO: ‘Why Nigeria, 7 other countries banned digital currency trading’

It, however, realised that crypto currency is both an opportunity and threat, hence the need to ensure that that the nation and citizens do not miss out on the opportunities it offers and in the same vein, mitigate and prevent likely consequential effects on the nation’s economy and security.

Contributing to the motion, Senator Solomon Adeola (Lagos West) stood against banning of crypto currency. Rather, he asked the CBN to put in place regulatory mechanism as practiced in other countries.

Adeola suggested that operators of the digital platform should be invited alongside the regulating agencies to enable cross – fertilization of ideas on the subject but the Senate President, Ahmad Lawan, insisted that the invitation should be limited to the regulators.

Also, Senator Bassey Akpan (Akwa Ibom North East) said, “As the world has become a global village, technology has redefine business transaction and payment. We can’t be running away from the obvious.”

He added that it was the responsibility of the CBN to put Nigerians abreast of the usage of the currency.

Toeing same path, Senator Biodun Olujinmi (Ekiti South) said, “Nigeria did not create crypto currency, we cannot kill it and we cannot enforce how it is being used. Nigeria cannot immune itself but we can regulate the environment. What we don’t create, we cannot ban. I support the motion.”