Prof. Uwaleke Faults CBN On Cryptocurrency Circular

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Professor Uche Uwaleke.

Uche Uwaleke, a financial Economist and Professor of Capital Market at the Nasarawa State University, has faulted the Central Bank of Nigeria (CBN) over the recent circular to Banks in Nigeria on Cryptocurrency transactions.

Prof. Uwaleke said, given the weighty nature of the directive, he believes, CBN must have consulted relevant stakeholders especially the Bankers Committee before taking the decision, but that the only flaw was that the apex bank did not state any reason for taking such course of action.

TheFact Nigeria reports that CBN in a circular of January 12, 2017 ref FPR1DIR/GEN/C1R106/010, cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs) and members of the pubic on the risk associated with transactions in cryptocurrency.

Nevertheless, Uwaleke said, he believes the measure is only temporary, given that cryptos have come to stay, therefore, CBN and the Securities and Exchange Commission (SEC) should come up with a regulatory framework for crypto asset trading in Nigeria.

His reaction reads: “Given the weighty nature of the directive, I want to believe that the CBN must have consulted relevant stakeholders including the Bankers Committee before taking the decision.

“I am inclined to believe that it was well thought through and not a unilateral decision.

“The fact is that what the CBN could see in a squatting position, many cannot see standing.

“So, i think the directive should be seen in the light of this fact that the CBN may have information which may not be available to the public.

“In my view, the flaw in that circular is that it did not state the reason why the apex Bank is taking that course of action.

“It should have done so especially if it’s to do with fraudulent activities and threats to financial system stability.

“I recall that not too long ago at some point, China, widely seen as the home of Cryptocurrencies, had to ban trading in bitcoins.

“I believe this measure is only temporary. Given that cryptos have come to stay, the CBN and the SEC should come up with a regulatory framework for crypto asset trading in Nigeria,” he said.

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