Osinbajo disagrees with CBN over cryptocurrency ban

• Urges proper regulation
• CBN welcomes Osinbajo’s counsel

Vice-President Yemi Osinbajo (SAN) has disagreed with the position of the Central Bank of Nigeria over the ban on cryptocurrency, saying the monetary authorities should only provide the required regulatory regime that will address concerns on its use.

The CBN Governor, Mr Godwin Emefiele, had on February 5, 2021 issued a directive asking banks to close all accounts linked with cryptocurrency.

The CBN governor, citing instances of investigated criminal activities that had been linked to cryptocurrencies, stated that the legitimacy of money and the safety of Nigeria’s financial system was central to the mandate of the CBN and declared that “cryptocurrency is not legitimate money” because it was not created or backed by any central bank.

However, Osinbajo, who spoke on Friday at the Bankers Committee Vanguard in Lagos, said no fear should be applied in terms of cryptocurrencies.

The Vice President advised the monetary authorities to provide a “robust regulatory regime” that would address the concerns about cryptocurrencies.

Osinbajo said, “Some of the exciting developments we see call for prudence and care in adopting them, and this has been very well articulated by our regulatory authorities.

“But we must act with knowledge and not with fear. We must ensure that we are in a position to benefit and prevent any of the adverse side effects or any of the possible criminal acts that may arise as the consequence of our adopting or taking any of these options.

“I fully appreciate the strong position of the CBN, SEC, and some of the anti-corruption agencies on the possible abuses of cryptocurrencies and their other well-articulated concerns, but I believe that their position should be the subject of further reflection.

“There’s a role for regulation here, and it is in the place of our monetary authorities and SEC to provide a robust regulatory regime that addresses this serious concerns without necessarily killing the goose that might lay the golden eggs.”

Osinbajo said in the coming years cryptocurrency “will challenge traditional banking, including reserve banking, in ways that we cannot yet imagine.”

CBN welcomes Osinbajo’s counsel

Meanwhile, the CBN has acknowledged the Vice President’s counsel in support of the regulation of digital currencies which has sparked some controversies among Nigerians after an order from the apex bank to commercial banks to restrict cryptocurrencies related transactions.

The CBN said via its official twitter handle, @cenbank, that it had noted Osinbajo’s knowledge-based advice.

The tweet read, “#Osinbajo advises #CBN to put in place a thoughtful & knowledge based regulation, cautioned on the need to ensure that we are in a position to prevent any of the adverse side effects or even possible criminal acts that may arise as a consequence of adopting blockchain technology. “The banking sector plays a crucial role in promoting increased & inclusive growth in Nigeria, VP #Osinbajo commended #CBN for the forward looking support for growth related initiatives, especially under the economic sustainability plan.

“The VP #Osinbajo also commended the DMBs for their patriotic contributions to sustain growth but called for the need to further deepen the provision of capital that would allow businesses to grow over the long term.”