There are indications that financial regulators of Nigeria is not ready to regulate the cryptocurrency space anytime soon in the country.
Dr. Ibrahim Alley of the Research Department of the Nigeria Deposit Insurance Corporation (NDIC) has confirmed this situation in the Nigerian financial sector at the forum of the Finance Correspondents Association of Nigeria (FICAN) in Abuja.
Dr. Ibrahim Alley said that some countries around the world has recognised crypto currencies because the level of its economic development can accomodate the severe harm it can cost investors.
He notes that Nigerian regulators doesn’t want Nigerians to invest in schemes or new financial space that they are yet to fully understand. He also notes this is not under the provisions of the Nigerian regulatory authorities yet.
This new update puts a cautionary move on the already inaugurated Fintech Roadmap Report of the Fintech Association of Nigeria accepted by the Nigeria Capital Markets classifying cryptocurrencies as securities and commodities.
He however notes that if fintech operations will pose risks manageable within the regulatory and supervisory framework. Then it is accepted and included within the framework for effective risk management and stable financial system.
He also notes that if its not allowed or included then the monetary and banking supervision and regulatory authorities will avoid it in the case of Nigeria and many other Sub-Sahara African countries like Ghana, Kenya.
The monetary and banking regulators of Nigeria can also choose to either ban cryptocurrency absolutely like in Algeria, UAE or it will do so implicitly like in China, Lesotho and others.
“Just like regular financial institutions are regulated to protect the public from risks, so are the emerging Fintech operators. The approach and severity of regulatory stance correspond to the level of risks posed by Fintech operations to the public and financial stability.”
Dr. Ibrahim Alley
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According to Dr. Ibrahim, possible risks that will be created by Fintech platform includes; lack of consumer understanding; Mis-selling of products and services; financial exclusion; data privacy, security and protection; and reduced competition.
We can recall that previously around October 2019, NDIC said it will be putting up a special team of experts in innovation and digital technology including blockchain and artificial intelligence under its organisation NDIC.
Following its intentions to bring together special team of experts in digital technology, the Nigeria Deposit Insurance Corporation, NDIC, opened up a new department called “Fintech and Innovations Unit” under it’s organization.
This new unit was created in February 2020 in response to the emerging technologies like blockchain, artificial intelligence and its use and application in offering better financial services.
This is in consonance with the Corporation’s Strategic Vision to become one of the best deposit insurers by the year 2020.
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