The Nigerian Senate on Thursday asked its Committees on Banking, Insurance and Other Financial Institutions, ICT and Cybercrimes and Capital Market to invite the Governor of the Central Bank of Nigeria, Godwin Emefiele to brief it on the recent ban on cryptocurrency in the country.
It also invited the Director-General of the Securities and Exchange Commission (SEC), Lamido Yuguda, to meet with its joint committees on the issue.
The CBN on Friday, February 2021, asked banks in Nigeria to close all accounts linked to cryptocurrency trading. The decision has sparked protests from various sections of the Nigerian economy, with some saying it would lead to job losses and higher unemployment.
The Senate said information from the two regulators would help it “determine the opportunities and threats of the cryptocurrency on the nation’s economy and security”.
The decision to invite the regulators came after a motion by Senator Istifanus Gyang and Tokunbo Abiru, titled, “CBN decision to stop financial institutions from transacting in cryptocurrencies and matters arising therefrom”.
Senator Gyang who presented the motion urged his colleagues to note that the CBN has issued a directive stopping all financial institutions from transacting in cryptocurrencies.
Gyang noted that the directive was a follow up to CBN’s earlier directives in January, 2017 and February 2018 which “forbade banks not to use, hold, trade and/or transact in cryptocurrencies.”
He further informed the Senate 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.”
He observed that cryptography is a “method of encrypting and hiding codes that prevent oversight, accountability and regulation upon which the CBN says its use in Nigeria violates and contravenes existing law as only the CBN is authorized by law to issue legal tender.
“Concerned that Crypto currency by nature is anchored on anonymity, obscurity and concealment of its patrons and actors 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, etc.
“Aware that the action and directive of the CBN has attracted sharp reactions from Nigerians and has become a topical subject of national discuss; and
“Realized that Crypto currency 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 Crypto currency offers and in the same vein, mitigate and prevent likely consequential effects on the nation’s economy and security.”
The joint committee was given two weeks to report back to plenary by the Senate President.
