CBN Gov: Crypto Has Changed The Financial Sector Globally
The Central Bank of Nigeria (CBN) governor commented recently on the potential of digital currencies. The governor said digital currencies had brought improvements into the financial industry.
Also, they have forced most financial institutions to alter their methods of operation. This is to allow them to integrate crypto into their operations.
On July 15th, Daily Nigeria reported that Godwin Emefiele, CBN Governor, discussed crypto at the MPC retreat. He said despite the hazards linked with crypto and fintech, they have potential.
Emefiele noted that these technologies provide financial inclusion, fueling growth and reducing poverty. Hence, nations should pay attention to them.
According to him, AI, fintech, crypto, machine learning, and digital payments have revolutionized the financial sector. Therefore, he said financial firms must reconsider regulating the industry.
Before now, the country had banned the usage of crypto. Also, it forbade financial institutions from having anything to do with crypto.
For instance, the bank once fined about four banks the sum of 800 million Naira ($1.9 million). This was for allegedly encouraging crypto trades in 2021.
Emphasis On New Strategy For Crypto Regulation
According to Emefiele, the nation has to develop a fresh strategy to alter its monetary laws. This is to make room for crypto usage since it has great potential.
Also, the governor said that the Monetary Policy Committee (MPC) of the central bank would work on this strategy. It would choose a new method to enhance the nation’s monetary system.
Furthermore, Emefiele asked MPC members to familiarize themselves with the digitized economy. He said:
“MPC members must have expert knowledge of the interaction of digitalization with financial policy aims, objectives,, and instruments. This is necessary to ensure the applicability of financial regulation and monetary regulators in the new digital environment.”
Growing Cryptocurrency Users In Nigeria
Generally, the Nigerian government has been forced to regulate the cryptocurrency industry. This is because most of the country’s citizens possess various crypto assets.
Crypto exchange platform, KuCoin, performed an analysis in the country in April. The result showed that over 33.4 million Nigerians aged 18 to 60 had crypto or were involved in cryptocurrency trading.
This is about 35% of the country’s population. Presently, most Nigerians use crypto as a store of wealth due to the instability of the Naira. Also, they use it as a method of money transfer.
CBN has stepped up with regulations in response to the rise of digital currencies. The central bank has targeted unlicensed cryptocurrency service providers operating in the county.
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