CBN’s policy against trade in cryptocurrencies needless, says Moghalu

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A former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has said the recent hard stance of the Central Bank of Nigeria on trade in cryptocurrencies in Nigeria is needless and uncalled for.

It can be recalled that the CBN had earlier directed deposit money banks and other financial institutions to immediately close the accounts of such persons or entities transacting in or operating cryptocurrency exchanges, warning of severe regulatory sanctions in the event of any breach of the directive.

The order was contained in a circular to banks and other financial institutions, signed by the Director of Banking Supervision, Bello Hassan, and was expected to take effect immediately.

The CBN action has provoked some reactions from Nigerians, many of whom have faulted the apex bank’s directive, saying that there is no logical reason to prohibit crypto enabled transactions and that it runs contrary to the present administration’s promise to lift 100 million Nigerians out of poverty.

Moghalu, who was once in charge of the financial systems directorate at the CBN, explained that a lot of the activities in the world are going digital and would not recommend an outright ban.

While explaining that crypto is becoming a real factor in the country’s investment ecosystem, as well as a source of livelihood for many Nigerians, he supported the sentiments of many other Nigerians, noting that the move is seen as though the government is always taking actions aimed at taking away opportunities from Nigerians especially in a depressed economy.

“$500 million worth of Bitcoin has been traded in Nigeria within the last five years and Nigeria is one of the top 10 countries in the use of cryptocurrencies in the world today”.

“Also, one of the things that attract Nigerians a lot to cryptocurrencies is because the Central Bank and I have said this you know a lot of the policy-making that has come out of the bank in recent years have been ad hoc, changes from today to tomorrow and so on, policies concerning remittances, policies concerning foreign exchanges and so on and so forth.

“But trading in these cryptocurrencies for many people protects them from fluctuations in the value of the naira because every fiat money, every currency in the world over time depreciates in value because of inflation and this is one of the reasons people go for cryptocurrencies.”

Moghalu said that he believes that any investment has risks and if he was in a position to make a decision, it would be to balance the risks as against the current realities of the country.