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CBN makes U-turn on Cryptocurrency regulation

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Barely two weeks after it placed a ban on cryptocurrency trading, the Central Bank of Nigeria, CBN, has resorted to a new approach on blockchain technology due to its improved global acceptance.
This was made known by the apex bank and the Securities and Exchange Commission (SEC) during a virtual lecture organised by the Association of Capital Market Academics of Nigeria (ACMAN) in Abuja on Sunday.
ACMAN is a network of researchers in the capital market, mostly comprising of lecturers.
The CBN and SEC have agreed to collaborate and conduct research towards finding ways to regulate the Cryptocurrency market.
Head of Department, Registration, Exchanges, Market Infrastructure and Innovation Department of SEC, Timi Agama, described cryptocurrency market as an air that could currently not be caged or regulated.
He also noted that cryptocurrency could not be ignored as it is a market of about two trillion dollars.
According to Agama, the world cannot be moving forward and Nigeria will be static.
He said the cryptocurrency market was a market to look into, however SEC or the capital market would not accommodate or encourage any fraudulent practices that permits money laundering.
“There is a lot of investment move into the cryptocurrency market and the tendency is that it will reduce the amount of investments in the stock market.
“Part of the desire of the SEC even in the future is to provide a regulatory framework that will take care of all these challenges that we have seen internationally and the entire world is grappling with in terms of cryptocurrency and digital assets.
“For us at SEC and capital market, it is something to look at, the world cannot be moving forward and we will be static, no.
“It is important for us to review, understand, appreciate and introduce regulations that will guide the movement of the market in this direction.
“A market that has opportunity for ICOs, derivatives, is not a market we can ignore.
“ It is our desire that we do more work, collaborate as regulators and analyse to make sure that we provide a level playing field where Nigerians, international investors and whoever is interested in this space will be comfortable and happy.
“I hope that in doing that, we are going to be able to drive foreign portfolio investment, Foreign Direct Investment (FDI) into this country and build our capital market,’’ he said.
The Director, Financial Policy and Regulation Department of the CBN, Dr Kevin Amugo, said the ban was to enable it work together with stakeholders in addressing the technology’s anonymity.
Amugo stated that the CBN would continue to develop policies that would optimise the opportunities of the financial technology industry and promote economic landscape of the country.
He went further to say that consumer protection was a huge challenge in the cryptocurrency market as it is speculative and its price wasn’t driven by economic fundamentals.
“The committee on cryptocurrency headed by the National Security Adviser and members are EFCC, NFIU, SEC, NAICOM and all regulators to strategise and come up with a national position not a monetary policy position.
“We have issued our initial draft but COVID-19 impeded our efforts to conclude our actions.
“Because of interests crypto has regenerated, I think it is high time we reconvened and ensure that we take a national position, so that what is issued is a national position not a CBN’s or SEC’s position.
“We are not stifling fin-tech operations, CBN has been proactive in granting licenses to fin-tech operators.
“The way forward for us will be continuous engagement, ongoing consultations and academic research.
“We are engaging internationally and locally to ensure that we come out with a harmonised and implementable position,’’ he said.
Chief Executive Officer of the Eagle Global Market (EGM) Lagos, Mr Gbite Oduneye, appealed to the CBN and SEC to proffer strategies to safeguard users against money laundering in the market.
He appealed to regulators to find ways to regulate the cryptocurrency market due to the prospects inherent.
“We understand the difficulties in the market but the regulators must organise and look for ways, organise and make people operate the way they want in the market.
“Every new innovation will come with a number of difficulties but we have the innovative minds, great regulators that can enable us to take advantage in this,’’ he explained.

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