Vice President Yemi Osinbajo has stated there is a need to develop a robust regulatory regime; that is thoughtful and knowledge-based for cryptocurrency.
Osinbajo said that rather than adopt a policy that prohibited cryptocurrency operations in the country; regulators must act with knowledge and not fear.
Osinbajo’s spokesman, Laolu Akande, in a statement on Friday, February 26, in Abuja, said the vice president virtually delivered a keynote address at a one-day economic summit.
The summit was organised by the Central Bank of Nigeria (CBN), the Banker’s Committee, and the Vanguard Newspaper, themed “Bankers’ Initiative for Economic Growth”.
“I fully appreciate the strong position of the CBN, Securities and Exchange Commission (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 is a role for regulation here. And it is in the place of both our monetary authorities and SEC; to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs.
“So it should be thoughtful and knowledge-based regulation not prohibition; the point I am making is that some of the exciting developments we see a call for prudence and care in adopting them; but we must act with knowledge and not fear.”
Osinbajo said that there was no question that blockchain technology generally and cryptocurrencies, in particular, would soon challenge traditional banking; including reserve (Central) banking, in unimaginable ways.
According to him, there is a need to be prepared for that seismic shift as it may come sooner than later.
“Already remittance systems are being challenged; blockchain technology will provide far cheaper options to the kind of fees being paid today for cross-border transfers.
“I am sure you are all aware of the challenge that the traditional SWIFT system is facing from new systems like Ripple which is based on the blockchain distributed ledger technology with its own crypto tokens.
“There are, of course, a whole range of digital assets spawned daily from block-chain technology. Decentralized finance, using smart contracts to create financial instruments; in place of central financial intermediaries such as banks or brokerages are set to challenge traditional finance.
“The likes of Nexo finance offer instant loans using cryptocurrency as collateral; some reserve banks are investigating issuing their own digital currencies.”
On national development and the public and private sector interventions, the vice president emphasised that in order to engender sustained economic growth, stakeholders must think in terms of scale.