The Central Bank of Nigeria believes that the recent ban on digital currencies was in the best interests of the public. During a recent Senate hearing, CBN Governor Godwin Emefiele went on to claim that digital currencies are not legitimate money.
CBN issued a circular two weeks ago banning all banks from processing transactions related to digital currencies. In its circular, it asked banks to identify individuals and companies trading digital currencies and to close their accounts. Days later, the Senate asked the CBN governor to inform him of the decision. As CoinGeek reported, several senators felt the ban was too strict and hoped the CBN would reconsider it.
As the local sales outlets are now reporting, the governor has asserted himself and defended his decision to ban payments in digital currency. He alleged that the use of digital currencies by unregulated companies was against both an existing law and the mandate of the CBN.
The governor highlighted the anonymity of digital currencies as a primary concern of the regulator. This anonymity enables criminals to carry out money laundering and other vices, he said.
Governor Emefiele, like many others, mistakenly believes that Bitcoin is anonymous. As Dr. However, as Craig Wright has stated, it is not. Bitcoin offers privacy to its users, but it is in no way anonymous. In fact, Bitcoin empowers regulators by providing them with an immutable ledger that lists all of the transactions made by users.
The governor told the Senate, “Cryptocurrency is not legitimate money as it is not created or supported by any central bank. Cryptocurrency currently has no place in our monetary system, and cryptocurrency transactions should not be processed through the Nigerian banking system. “
CBN will continue to study digital currencies for a better understanding, the governor promised. The ultimate goal is to educate Nigerians about digital currencies so they can make better financial decisions, he added.
The Securities and Exchange Commission was the other regulator with an interest in digital currencies. It’s been for Bitcoin for years and classified digital currencies as securities in September. However, given CBN’s hostility towards the industry, the SEC has also distanced itself.
SEC director general Lamido Yoguda testified in the Senate that his organization had also warned Nigerians of risks to digital currencies. The SEC worked to regulate the industry, but suspended that process in view of the CBN ban, he said.
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