The Senate on Thursday summoned the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, and Director General of the Security and Exchange Commission, Lamido Yuguda, over the decision of the CBN to restrict cryptocurrency in the country.
The decision was taken following a motion by Senator Istifanus Gyang and Tokunbo Abiru titled ‘CBN decision to stop financial institutions from transacting in cryptocurrencies and matters arising therefrom’.
The Senate asked its committees on Banking, Insurance, and Other Financial Institutions, Capital Market, and that of ICT and cybercrime to summon Emefiele and Yuguda.
The CBN governor and DG SEC are expected to brief the panels on the opportunities and threats of the cryptocurrency on the nation’s economy.
The Senate President, Ahmad Lawan, asked the joint committees to listen to Emefiele and Yuguda, and submit their report for the consideration of the Senate in plenary within two weeks.
Leading the debate on the issue, Gyang noted that the CBN issued a directive stopping all financial institutions from transacting in cryptocurrencies.
He said the CBN decision was a follow up to its earlier directives in January 2017 and February 2018 which forbade banks not to use, hold, trade and /or transact in cryptocurrencies.
He further noted that the decision of the CBN was said to have been predicated on the need to safeguard the Nigerian economy from the adverse effects of the cryptocurrency regime which are unregulated digital or virtual currencies that are issued by anonymous entities and secured by cryptography.
Gyang described cryptography as a method of encrypting and hiding codes that prevent oversight, accountability and regulation upon which the CBN said its use in Nigeria violated and contravened existing law as only the CBN was authorised by law to issue legal tender.
He expressed concern that cryptocurrency by nature was anchored on anonymity, obscurity and concealment of its patrons and actors.
He said such practise was making it difficult if not impossible to trace, track and uncover those that may deploy it for ignoble and illegal usage such as money laundering, terrorism financing, drug purchase, cybercrime, among others.
He explained that the action and directive of the CBN had attracted sharp reactions from Nigerians and had become a topical subject of national discuss.
He said, “Cryptocurrency is both an opportunity and a threat, hence the Senate has a responsibility to ensure that the nation and citizens do not miss out on the opportunities that cryptocurrency offers.
“In the same vein, the Senate intervention could mitigate and prevent likely consequential effects on the nation’s economy and security.”
In his contribution to the debate, Senator Tokunbo Abiru pleaded with the CBN to exercise caution in the implementation of the ban on cryptocurrency because it was currently serving as a source of revenue for many young people.
He said it would be difficult to stand on the way of such innovation.
He said, “The attraction is better underscored by the typical loss of value in legal tender.
“Over time, due to inflationary pressures, currencies lose values and particularly in the period that is further challenged by recession.
“In Nigeria, in the last five years, we have had an increase in cryptocurrency investment to the tune of $500m. Last year alone there was over $140m investment in cryptocurrency.”
He noted that the CBN was concerned because there was challenge of financial system stability, cyber crime and terrorism.
Senator Ibrahim Hadejia said Nigeria was already embracing global digital trends before the CBN came up with the shocking decision to ban cryptocurrency.
He said, “Last year, the SEC came up with a nod to the cryptocurrency as an investment channel.
“The fact of the matter is that we can’t ban cryptocurrency because it is not regulated. As we speak now, people are still trading on cryptocurrency.
“The CBN is actually losing its oversight functions on what is happening. Banning cryptocurrency would mean that we are creating more dangers than solving a problem.
Senator Solomon Adeola also condemned the ban of cryptocurrency.
He said, “ I am strongly against the outright ban of cryptocurrency as a medium of exchange because the CBN has not told Nigerians what
it had put in place to regulate the activities of those who are operating the cryptocurrency.
He said, “Banning it is shying away from oversight duties because all over the world, the cryptocurrency is regulated and Nigeria will not be an exception.
“The operators of the currency are everywhere looking for people to invest. I think the CBN can regulate cryptocurrency by putting an end to its use for terrorism financing.”
Senator Mohammed Sani Musa said cryptocurrency had become a world wide means of transaction.
He said, “It is being protected by a technology that is so strong and I don’t see how we regulate it.
“I don’t know the kind of regulation that we can do that can stop usage. The bitcoin currency has made our currency valueless.
“Seven years ago, my son bought three pieces of bit coin which is now going for N17m per one.
“If we have an economy that is very weak and we cannot regulate cryptocurrency in Nigeria, I don’t know how our economy would be in the next few years.”
He advised the CBN to work with the ministres of Science and Technology and Communication to see how cyberspace would be regulated.