Nigeria Calls For Bitcoin Regulatory Framework

Bitcoin could do a lot of good in continents such as Africa, where there is a huge lack of financial services.  This doesn’t mean the African population is not worthy of financial services, but institutions simply don’t expand there due to there being little to no profits to be made from doing so.  Nigeria, on the other hand, is calling for Bitcoin regulation to counter money laundering and avoid international penalties.

Central Banks Don’t Understand Bitcoin Properly

Over the course of recent years, nearly every country in the world has issued warnings about Bitcoin and its lack of regulation and oversight.  Despite government officials’ best efforts, Bitcoin will never be overseen by a central authority, yet at the same time, industry leaders are open for dialog as far as regulatory measures are concerned.

During the second Anti-Money Laundering Combating Financial Terrorism Stakeholders Consultative Workshop, Nigeria’s Central Banks’s Dr. Okwu Nnanna warned again about the dangers of Bitcoin and other virtual currencies.  Clearly, this shows how little these people actually know about Bitcoin, and how it is being used.

“Virtual currency was dangerous because it was not a legal tender of any country hence it has a borderless nature without jurisdiction which makes it a channel for money laundering.”

To make matters even worse, Obot Akpan, deputy director of Financial Policy and Regulation Department at Central Bank of Nigeria chimed in with even more derogatory comments about Bitcoin and virtual currency.  People who are stuck in a certain mindset, without allowing room for improvement, will say the darndest things apparently.

“Financial Action Task Force (FAFT) has observed that virtual currency payment products and services (VCPPS) present opportunity for money laundering and other crime risk that must be identified and mitigated.  Virtual currencies present a wide range of issues and challenges that require financial authorities to consider and the challenges posed aNYDFSre unique and call for urgent regulator responses.”

Despite the negative comments made by government officials and the CBN, Nigeria is still showing a definite interest in virtual currencies.  Without proper regulation, Bitcoin and other virtual currencies will never gain any form of legitimacy in the areas where they could have the biggest impact.

Stark Contrast To BitLicense, Or Not?

One thing that is of an even bigger concern to the general Bitcoin community is whether or not Nigeria will take a regulatory approach resembling BitLicense.  In recent weeks, most Bitcoin companies have halted their services in the New York state area due to BitLicense requirements and we can only hope to see a different outcome in Nigeria.

It is positive to see more and more countries trying to embrace Bitcoin and other virtual currencies, once a proper regulatory framework has been created.  Nigeria could benefit from the financial aspect of Bitcoin, as well as the underlying blockchain technology.  However, as we have seen with BitLicense, too harsh requirements will kill any form of Bitcoin innovation before it even began.

Source: Business Day Online

Images courtesy of NYDFS, Shutterstock