Wednesday, September 2, 2015

Central Bank of Nigeria trying to regulate bitcoin

The Central Bank of Nigeria has called for the regulation of the cryptocurrency, bitcoin, in Nigeria. Businessday reports that CBN is making the call in a bid to stem money laundering and protect consumers.

The intention of the apex bank was disclosed at the second Anti-Money Laundering/Combating the Financing of Terrorism stakeholders’ consultative workshop in Nigeria’s capital, Abuja. The workshop was seen as an occasion that “will further assist in laying a solid foundation for the much needed regulatory climate on the operations of virtual currency in Nigeria.”

“Virtual currency was dangerous because it was not a legal tender of any country hence it has a borderless nature without jurisdiction which makes it a channel for money laundering,” said Dr Okwu Nnanna, deputy governor of financial system stability at Nigeria’s Central Bank (CBN).

Obot Akpan’s, deputy director of Financial Policy and Regulation Department at CBN also touched on the Financial Action Task Force’s (FAFT) recommendation on closer monitoring of digital currency exchanges and gateways to counter money laundering and terrorism financing.

The central bank also expressed its fears over the currency’s volatility as it has increased in use for both payment transactions and investment purposes.

CBN is yet to outline the roadmap to executing this regulation, but it is hardly possible to regulate bitcoin as is.

The bank’s fears are accurate and may well be the foundation of a CBN study of the workings of bitcoin, but the call for bitcoin regulation seems more akin to CBN making a scripted call similar to what Nigerian regulators have been known to make when confronted with a development they do not understand.


Related story: Another Bitcoin service BitX launches in Nigeria

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