BUSINESS AND ECONOMY

Osinbajo kicks against prohibition of cryptocurrency, calls for regulation

Yemi Osinbajo, the Vice President of Nigeria has kicked against the prohibition of digital currency in Nigeria.

Osinbajo who called for the regulation of cryptocurrency in Nigeria said Cryptocurrencies in the coming years will challenge traditional banking in ways that cannot be imagined.

He said although he fully appreciates the strong position of the CBN, SEC and some of the anti-corruption agencies on the possible abuse of cryptocurrencies, he believes that their position should be the subject of further reflection.

He explained that the future of money and finance, especially for traditional banking, must be as exciting as it is frightening but disruption makes room for efficiency and progress.

”Blockchain technology will provide far cheaper options for the kind of fees being paid today for cross-border transfers. Osinbajo noted that “I am sure you are all aware of the challenge that the traditional SWIFT system is facing from new systems like Ripple, which is based on the blockchain distributed ledger technology with its own crypto tokens. There are, of course, a whole range of digital assets spawned daily from blockchain technology.

Decentralized finance, using smart contracts to create financial instruments, in place of central financial intermediaries such as banks or brokerages is set to challenge traditional finance. The likes of Nexo finance offer instant loans using cryptocurrency as collateral

There is a role for regulation here. And it is in the place of both our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs. So it should be thoughtful and knowledge-based regulation, not prohibition. The point I am making is that some of the exciting developments we see calls for prudence and care in adopting them but we must act with knowledge and not fear,” he added.

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