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Crypto celebrates 365 days after CBN imposed ban

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Today, February 5, 2022 makes it exactly one year since the Central Bank of Nigeria (CBN) released a circular addressed to banks and other financial institutions with the directive that transactions in cryptocurrencies and facilitating payment for cryptocurrency exchanges were prohibited.

The CBN had further instructed all banks and other financial institutions to identify individuals or entities that transact in cryptocurrency or operate cryptocurrency exchanges and close their accounts.

That CBN letter elicited varied reactions from the Nigerian public with many expressing concern about the potential negative effect it could have on the country’s growing cryptocurrency market and innovation in financial technology. I believe I was one of the most vocal voices of reason calling for a better approach to the impasse between the apex financial institution and stakeholders of cryptocurrency in Nigeria.

Unbeknownst to the body, it actually drove awareness and subsequent penetration of cryptocurrency in Nigeria with its action. For one, the memo created interest in some Nigerians who were hitherto unaware of the existence or workings of cryptocurrencies. This also pushed its adoption as Nigeria became the biggest country with the adoption of cryptocurrency-Bitcoin- worldwide, second only to the United states, generating more than 400 million dollars’ worth of transactions.

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At the onset of the embargo placed by the CBN, I had advised the CBN to revisit the ban on cryptocurrency transactions and see digital currencies as another tool for economic growth. In fact, I challenged the CBN Governor, Godwin Emefiele to a debate on the subject matter, a gauntlet he never picked. Towing my line of reasoning, The Nigeria Economic Summit Group (NESG) also advised the CBN to carry out a comprehensive study on the workings of cryptocurrencies to check its excesses.

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Interestingly too, Vice President Yemi Osinbajo, speaking at a recent CBN Bankers’ Committee Economic Summit, called for the regulation of cryptocurrency transactions in Nigeria rather than an outright ban.

Osinbajo urged the apex bank to develop a robust regulatory system to check such transactions. “Rather than adopt a policy that prohibits cryptocurrency operations in the Nigerian banking sector, we must act with knowledge and not fear and develop a robust regulatory regime that is thoughtful and knowledge-based. There is no question that blockchain technology generally and cryptocurrencies, in particular, will in the coming years challenge traditional banking, including Central banking, in ways that we cannot yet imagine. We need to be prepared for that seismic shift. And it may come sooner than later,” he warned.

With all these warnings, it appeared that the CBN was set in its way, going ahead to introduce the e-Naira…something that could best be described as dead on arrival. A white elephant project that appears to be completely snubbed by Nigerians, the discussion on the e-Naira and its ramification to the growth of cryptocurrencies in Nigeria is a topic for another day.

I believe that the conversation on regulating cryptocurrency in Nigeria is not a foregone one as there is still time for the CBN to reverse its obnoxious stance on it. I reached out to the Nigerian Senate last year, urging them to tour the part of their counterparts in the U.S to investigate cryptocurrency and why it is thriving in Nigeria.

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Nigeria’s advantage in leading the adoption of cryptocurrency in the world should be an obvious pointer to the fact that no matter how it is being stifled, its trajectory can only be upward and forward. The sooner this is recognised, the better for the progress of the nation.

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The United States understands this and that is why they are quickly mapping out the framework for the regulation of cryptocurrencies in the USA media report stated it like this: “The White House is reportedly preparing an executive action that will instruct federal agencies with regulating cryptocurrencies. According to this source, the national security memorandum, which is expected to be released in February, would assign portions of the government the task of analyzing digital assets and putting together a regulatory framework that would cover cryptocurrencies, stablecoins, and non-fungible tokens (NFTs).

“This is designed to look holistically at digital assets and develop a set of policies that give coherency to what the government is trying to do in this space,” said the source. In particular, those involved in the initiative would be, the State Department, Treasury Department, National Economic Council, and Council of Economic Advisers.

Russia is also not left out of this. Understandably and quite like Nigeria, cryptocurrencies have been a controversial subject in Russia for many years. While the government has warned of illicit uses for cryptocurrencies, it eventually gave them legal status in 2020, but banned their use as a means of payment.

Like our own CBN, the Russian Central Bank suggested banning the usage, trading and mining of cryptocurrencies over concerns of illicit funding and financial instability. However, other authorities, including representatives from the Ministry of Finance, believe regulation to be preferable to restrictions.

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These conflicting approaches triggered President Vladimir Putin to request that the competing authorities “come to some kind of consensus,” at a recent government meeting. At the insistence of the central bank, the finance ministry prepared a concept for regulating the industry. Potential policies may include carrying out all crypto transactions through Russian banks, identifying crypto wallet holders, and classifying digital asset investors as either qualified or unqualified.

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It is not too late for Nigeria to tour the Russia and US part. As one of the frontline countries in the adoption of cryptocurrencies in Nigeria, we need to realise that the crypto is the new oil, crypto signifies much more than hope for the Nigerian youth and young at heart. Crypto is here to stay and suppressing it is akin to a waste of time. In the last 365 days, this has not done any good. In fact, it led to the soaring of cryptocurrency. What to do? Consider regulation!

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1 Comment

1 Comment

  1. Prisca

    February 5, 2022 at 3:14 pm

    They indeed need to consider regulation.

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Elumelu says strong insurance sector foundation for strong Nigeria

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Tony Elumelu, CON, Chairman, Heirs Holdings and United Bank for Africa Plc (UBA), giving a keynote address at the recent 60th anniversary of the Nigerian Council of Registered Insurance Brokers (NCRIB) conference, underlined the importance of a vibrant, well capitalised and deep insurance sector to Nigeria’s economy.

“Not least in these testing times, our people need financial security, secure savings and protection against uncertainty. Our industry needs to offer simple, smart products, that give value and deliver. We need an industry that is professional and can catalyse investment in key sectors such as power, infrastructure and housing”.

Elumelu congratulated the NCRIB on its anniversary and the role it has played, joining other prominent guests including Commissioner for Insurance and the President of NCRIB. But he stated there was no room for complacency, with the sector needing to regain trust, stamp down on malpractice and fundamentally evolve its customer proposition to deepen the insurance penetration.

He emphasised the commitment of Heirs Holdings to the insurance industry.

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He said: “Our two insurance companies, Heirs Life Assurance and Heirs Insurance Limited, are both leading democratisation of access to insurance – which is a tool for financial inclusion, employment creation, poverty eradication and female advancement. In a country of two hundred million, we can, should and must be more relevant than we are today. I am an optimist, not a pessimist. I know that times are tough, but together we can, and we will transform our industry, create value, and provide solutions that demonstrate the value of insurance to our people.”

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Reiterating Elumelu’s stance, Mr. Sunday Thomas, Commission for Insurance called for more collaboration and effort in enabling access to insurance, stating that the industry could do more in this prospect.

He said: “It is a fundamental truth that the insurance sector exists for other sectors to thrive. A lot has been achieved, but there is still more work to be done. Until insurance becomes the oxygen that homes and other industries breathe, and a subject that is known to everyone, we have not arrived”.

The President, NCRIB, Barrister Rotimi Edu, appreciated Elumelu for delivering the keynote speech at the event, while making a commitment on behalf of the Council to further deepen insurance penetration in Nigeria.

He said: “The Council is already creating avenues through strategic engagements with notable governmental and non-governmental institutions to deepen the industry in the country”.

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Heirs Insurance and Heirs Life are lead sponsors of the NCRIB 60th Anniversary, alongside investment group United Capital Plc and healthcare management company, Avon HMO, all investee companies of Heirs Holdings, a pan-African investment group, with a portfolio spread across 24 African countries and four continents.

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150 Years: FrieslandCampina Pays Tribute to Member Dairy Farmers

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To mark the end of its 150th anniversary year, FrieslandCampina presents its new short film, A New Day. The film pays tribute to the many generations of dairy farmers who have made FrieslandCampina what it is today; a dynamic, forward-looking dairy cooperative and a global company.

‘A New Day’ tells the story of the next generation of farmers, focused on the future of dairy farming with lots of passion and determination, while adapting to the rapidly changing world.

According to Hein Schumacher, CEO FrieslandCampina: “We are very proud of our farmers and our cooperative heritage. For over 150 years, our member farmers have always managed to adapt to what the market and society demand from them. By actively responding to evolving needs and constantly innovating, they have developed themselves into very innovative farmers.

“I have great admiration for the next generation of farmers, especially in these tense and uncertain times. They are building the future of sustainable dairy farming, with the same commitment and unwavering spirit as the many generations before them. This film is our tribute to all dairy farmers, young and old,” Schumacher said.

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Also commenting, Ben Langat, Managing Director, FrieslandCampina Sub-Saharan Africa said, “The story of our cooperative is a special one. ‘A New Day’ celebrates our farmers who are playing that critical role in bringing better nutrition to the tables of families across Sub-Saharan Africa. FrieslandCampina Sub-Saharan Africa salutes our farm heroes and remains steadfast in our commitment and support to the development and prosperity of our local dairy farmers.”

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The four-minute film tells the story of three young dairy farmers who are on a journey, sometimes literally, as they face dilemmas, make choices and emerge stronger, ready for a new day. The film shows the challenges they are facing in this rapidly changing world. ‘A New Day’ is the sequel to ‘The Story of Milk, produced in 2012, also by corporate cinema agency 1Camera.

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Watch it below.

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Asia’s richest man sees growing isolation for China

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Indian billionaire Gautam Adani says that China “will feel increasingly isolated” and the “foremost champion of globalization” would find it hard to bounce back from a period of economic weakness.

Speaking at a conference in Singapore on Tuesday, Adani said “increasing nationalism, supply chain risk mitigation, and technology restrictions,” as well as resistance to Beijing’s huge Belt and Road initiative, would impact China’s global role.

Asia’s richest man said that “housing and credit risks” in the world’s second largest economy were also “drawing comparisons with what happened to the Japanese economy during the ‘lost decade’ of the 1990s.”

Adani was speaking less than a month after the business mogul became the world’s third richest man, according to the Bloomberg Billionaires Index. He is the first Asian to take that spot.

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The founder of the eponymous Adani Group controls companies ranging from ports to power.

While pessimistic about China, Adani remains bullish about his own country, saying that India is “one of the few relatively bright spots from a political, geostrategic, and market perspective.”

He anticipates India to become the world’s third largest economy by 2030, with “the largest consuming middle class the world will ever see.”

Some technology firms looking to reduce their dependence on Chinese manufacturing already see India as an attractive alternative.

On Monday, Apple announced that it has started making its new iPhone 14 in India, as the technology giant looks to diversify its supply chain. While the company manufactures the bulk of its products in China, it has decided to start producing its latest devices in India much earlier than with previous generations.

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Businesses may have to move away from China not just because of its strict Covid restrictions, which have been hurting supply chains for months now, but also because of rising tensions between Washington and Beijing over Taiwan.

The US government ordered two of America’s top chipmakers to stop selling high-performance chips to China earlier this month. And, last week, leaders of America’s biggest banks said they could exit China if it ever attacks Taiwan.

Adani also mentioned the challenges facing the United Kingdom, and countries in the European Union, because of the war in Ukraine and Brexit.

“While I expect all these economies will readjust over time — and bounce back — the friction of the bounce-back looks far harder this time,” he said.

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