Moghalu Urges CBN to Reconsider Ban on Cryptocurrency Transactions

By Dike Onwuamaeze

A former Deputy Governor of the Central Bank of Nigeria (CBN), Prof. Kingsley Moghalu, has advised the CBN to reconsider its recent decision to ban cryptocurrency transactions in the country banking and payment systems.

He also suggested that the central bank could come up with effective regulation of the evolving digital currency revolution and possibly launch its own virtual currency as being done in some countries.

Moghalu, said this during an interview on Arise Television yesterday.

He argued that it would be preferable to regulate the cryptocurrency by either restricting its usage or subjecting it to some form of surveillance that would alert the CBN when abuses that could affect the financial system stability arise.

He said: “I think that there is need for a very serious study about this thing because many Nigerians are involved in cryptocurrencies. If your country is number 10 in the world usage of cryptocurrencies, I do not think that it is a wise approach to either ignore or banish it.

“My recommendation to the CBN is to really take a deep look of this whole thing and perhaps look at the possibility of the issuance of its own digital currency as China, Sweden and Uruguay and other countries are doing. What you do not know can be scary for you.

“If you think that you are too scared of what you do not know, then you will lose many opportunities and a lot of things will be happening under your nose because you pretend that it is a bad thing and you do not like it.”

Moghalu also emphasised the need for the Securities and Exchange Commission (SEC) to launch an investment education campaign to educate Nigerians about the risks associated in trading in cryptocurrency.

“I think the CBN should be imaginative and deploy risk management approach to cryptocurrency. Investments are risks that are personal to the investors as long as they do not affect systemic stability.

“I think this is the attitude we should take in respect of crypto currency,” he said.

Moghalu, who was the former Presidential Candidate of the Young Progressive Party (YPP) in the 2019 election, called on the CBN to be mindful of the fact that Nigeria is in a depressed economy and lot of Nigerians, especially the youths, are making their living from trading on the virtual currency.

He also debunked the argument that digital currencies are channels for fraud and money laundering, insisting that no payment system is devoid of fraudulent and criminal practices.

“They (cryptocurrencies) are not so large in volume that they could have a significant impact on the country’s financial system. It is just a question of policy framework. I do not see the reason why there will be a declaration of a ‘third world’ war between the central bank and the crypto currencies traders,” Moghalu said.