Business

Again, NDIC harps against digital currencies

Published

9 years ago

February 23, 2018

Not insured by NDIC

By Chioma Obinagwam

In view of the concerns expressed by the National Assembly and the general public about the incursion of Digital Currencies, the NDIC is issuing another warning to the users, holders and traders in Digital Currencies because of its inherent risks.

The corporation disclosed this in a statement issued recently on its website.

Digital currencies are unregulated electronic forms of monetary value that can act as means of payment, which include Bitcoins, Zcash, Moner, Litecoin, among others and are also referred to as Virtual or Crypto Currencies.

One of the major risks involved, the corporation disclosed, is that users of digital currencies are not insured by NDIC.

“Digital currency ‘units or accounts’ are not recognized by the CBN and are not insured by the NDIC unlike bank accounts. There is no protection, refund rights or redress for users of digital currencies,” he said.

The statement also indicated that Digital currencies are virtual money, stored in electronic medium called e-wallets and are vulnerable to losses due to loss of password, hacking, virus/malware attack etc.

“The loss of the wallet could result in the permanent loss of the digital currencies held in them,” it added

The corporation also stated that there is inherent instability in the rates because digital currencies are not issued or backed by any government, with no investor protection and are not protected by deposit insurance, hence, exposes the users to potential complete loss of value.

“The NDIC has equally warned banks and Nigerians, through several platforms to stay away from digital currencies because the Corporation does not provide insurance cover to risks and loses associated with trading in any form of currency not issued by the CBN,” it said.