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‘Why Nigeria has not adopted Bitcoin technology

Although the committee set up by the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to look into the possibility of the country adopting the technology driving Bitcoin and other digital currencies- blockchain- has submitted its report, several sub committees are still working on the issue, the Director, Banking & Payments System Department at the Apex Bank, Mr. ‘Dipo Fatokun, has said.
He disclosed this last weekend in Lagos. Specifically, he said that the issue was not something the authorities would want to rush to take a decision on given that the technology is still relatively new.

Fatokun said: “The NDIC and CBN committee has concluded its work, (but) it is a new technology, it is not something we can rush.

Some other sub committees are also working on it.” Similarly, Managing Director, Nigeria Deposit Insurance Commission (NDIC), Alhaji Umaru Ibrahim, last weekend disclosed that the commission and the CBN had set up a committee to look into the possibility of legalising the use of the digital currency, the Bitcoin, for transactions.

After Japan in early April this year began accepting Bitcoin as legal currency, more countries have started considering the possibility of legalizing the cryptocurrency as a payment method.

Unlike conventional currencies such as the naira, dollar, the euro, etc., Bitcoins are issued and managed without any central authority- no central bank, government, company, or commercial bank owning the process.

As such, it is more resistant to wild inflation, devaluation, import policies, currency fixing and corrupt banks. In addition, its proponents argue that it is a true floating currency whose value is determined by demand and supply. However, critics contend that the absence of a regulatory or central authority means that the chances of fraudsters using the process to launder money were very high.

Indeed, according to an industry source, due to the risks involved, the CBN is not likely to approve these cryptocurrencies.

The source said: “There are over 1,000 of such currencies globally, so, regulating how they are used for transactions will be a herculean task for central banks.”

It will be recalled that the NDIC boss told journalists at the 2016 Workshop for Financial Correspondents in Kaduna last December, that the Corporation and the CBN had constituted a committee to examine the advantages and disadvantages of adopting Bitcoin technology.

He said: “On our part, we have constituted a committee together with the central bank to have an in depth study of this phenomenal Bitcoin.

We will look at its advantages and disadvantages, what it means for the payment system and what it means for the safety and security of customers.

“We will also look at what it means for money laundering, anti-corruption, crime and measurement of money/near money instruments for the economy.

But we need a lot of education to do this and I’m calling on you (the media) to educate yourselves about all of this so you can educate the public.”

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