By Charles Ike-Okoh
FRI 26 FEB, 2021-theGBJournal- The Bankers Committee Vanguard provided Nigeria’s Vice President Prof. Yemi Osinbajo the stage to openly air his views on blockchain technologies and cryptocurrencies, the digital money phenomenon that has shaken up Central Banks across the globe.
‘’Let me say two things, first is that there is no question that blockchain technology generally and Cryptocurrencies in particular will in the coming years will challenge traditional banking, including reserve banking, in ways that we cannot yet imagine, so we need to be prepared for that seismic shift.,’’ the VP told the gathering at the Bankers Committee Vanguard
‘’The point I am making is that some of the exciting development we see call for prudence and care in adopting them, and this has been very well articulated by our regulatory authorities, but we must act with knowledge and not with fear and we must ensure that we are in a position to benefit and in a position to prevent any of the adverse side effect or any of the possible criminal acts that may arise in consequence of adopting or taking any of these options.’’
The VP noted that remittances system are already being challenged suggesting that Blockchain technology will provide far cheaper options for the kind of fees being paid today for cross-border transfers.
The VP played by the global book and suggested the adoption of the currency rather than shutting it out but at the same time urged prudence. His views, according to analysts will surely left the Central Bank of Nigeria (CBN) with a bruised ego following its strong objection to crptocurrencies.
One analyst told theGBJournal that the CBN stance lays bare its knowledge deficit on Cryptocurrencies and that VP’s take underscores that.
The CBN recently directed Nigerian money deposit banks and other financial institutions to close accounts of persons or entities involved in cryptocurrency transactions.
The CBN’s concern centres on the possible use of the currency for illicit activities like money laundering.
‘’The CBN pronouncement only costs the country the full benefits of Cryptocurrencies but cannot stop its use,’’ says Clem Ofuani, a former Presidential aide and former Economic Planning Commissioner in Delta State.
Meanwhile, central banks in developed economies, recognising the future impact of the virtual money are already creating mechanisms to forge ahead with the currency. On October 2020, a group of central banks together with the Bank of International Settlement (BIS) published a report outlining some key requirements that can help central banks meet their public policy objectives on the digital currency.
Central Banks recommended that Central Bank Digital Currencies (CBDCs) coexistence with cash and other types of money in a flexible and innovative payment system and that any introduction should support wider policy objectives and do no harm to monetary and financial stability.