FG may lift ban on crypto to promote blockchain policy

Financial and blockchain experts have stated that the federal government may soon lift the ban on cryptocurrency following the recently announced blockchain policy.

According to the recently approved National Blockchain Policy, “the Nigerian government recognizes cryptocurrency as one of the components that will catalyze the adoption of blockchain technology.

“Therefore, the Nigerian government, through this policy, provides a framework for the use of cryptocurrencies, among others, which can help reduce risks such as money laundering and fraud. This can help build trust in cryptocurrency and make it more accessible to businesses and individuals in Nigeria.”

This despite a ban on crypto transactions by the Central Bank of Nigeria in 2021.

According to apex bank, crypto-assets are used for illegal activities including money laundering, financing of terrorism, purchase of small arms and light weapons and tax evasion.

However, stakeholders who spoke to The PUNCH expected the CBN to change its stance and lift the ban on crypto due to the blockchain policy.

Commenting on the matter, the Principal Partner and Head of Blockchain and Virtual Asset Practice at Infusion Lawyers, Senator Ihenyen, stated that despite the CBN’s stance, cryptocurrencies were not illegal in Nigeria since the National Assembly had not passed any law to outlaw or criminalize digital assets.

He noted that crypto stakeholders expect the CBN and other relevant agencies to take advantage of the Federal Government’s National Blockchain Policy to fix the frictions it had with the sector.

Ihenyen, who is also the former president of the Stakeholders in Blockchain Technology Association of Nigeria, noted that the CBN ban/restriction of cryptocurrency-related transactions in Nigeria’s banking and financial sector was understandable, considering the risk of money laundering, terrorism financing and other illegal transactions, but the ban should be lifted.

“This is where the Money Laundering Act, 2022, comes in. In the new law, VASPs are considered financial institutions for the purpose of complying with AML/CFT. The NFIU is able to ensure monitoring and supervision. Banks and other financial institutions are also no strangers to AML/CFT compliance.

“In fact, this was the same position that the CBN took in its previous letter to regulated entities when it directed them to ensure adequate KYC for crypto-related entities. This is in line with global best practices, including standards recommended by the Financial Action Task Force. effective engagement and multi-stakeholder collaboration, Nigeria can get this right.”

Ihenyen argued that the policy would create a more robust platform for public-private sector collaboration, which would help open the window of opportunity for blockchain development, capacity building and mass adoption.

According to the CEO of BAA Consult, Dr Biodun Adedipe, the policy is welcome, given that blockchain is the underlying technology for cryptocurrencies and many other modern technology-based activities.

He said: “Crypto is just one of the applications that blockchain technology can be used for. Bitcoin is fundamental to fintech and the digital economy to simplify, scale and make convenient transactions and conduct of economic activities in general. Its relevance goes far beyond the payment system as it is popular for now.

“In my view, the issue is not about banning or not; it’s about having a robust regulatory framework and standards for trading, reporting and overseeing cryptocurrencies that are fundamental to deciding what to do. That is the prerequisite and it is actually the future.”

On his part, an economist and chairman of the Foundation for Economic Research and Training, Prof Akpan Ekpo, noted that the blockchain policy was not well thought out, hence the discrepancies between the ban and the proposed regulation.

He stated that there was a need for coordination between the necessary authorities involved in blockchain and cryptocurrency regulation.