‘ Why digital currency is crucial to Nigeria’s economic development’
TEMMANUEL PAUL is with Techpoint
Africa, a media platform dedicated to startups, entrepreneurship, innovation, and technology in Africa. Today at Four Points by Sheraton, Victoria Island, Lagos, Techpoint Africa is hosting the maiden Digital Currency Summit 2021, where experts and stakeholders will discuss future of digital money amidst recent Cryptocurrency ban by the CBN. Paul, in this interview with The Guardian, spoke on the importance of the summit to Nigeria’s digital transformation. Excerpts
Can we have a vivid understanding of what the digital currency summit is all about? ECHPOINT has been a major company that has been creating the Nigerian tech space narrative for the last six years. We have been at the forefront of innovation in Nigeria and Africa.
This event “digital currency summit” is more of a starter about building the future of money.
The theme- “Building the money future,” is to enable us look at the money of the future. The conference is going to bring the brightest mind in the world of digital currency. We will be looking at what digital currency is, to how it’s going to change everything in Nigeria’s economy, right from payment to investment and what the future of investment and payment is going to look like.
We are also going to be talking about regulations, like the recent ban on cryptocurrency by the Central Bank of Nigeria ( CBN). We will have the opportunity of looking at why the government is concerned about digital currency. The conference will ultimately focus on what digital currency and why everyone should care about it.
I must say that when we mention digital currency, we are not just talking about Bitcoin or Ethereum. It’s a broad and big system based on blockchain technology. We are going to be having experienced startup founders doing disruptive stuff with technology. We have people from regulators, stakeholders from the blockchain association of Nigeria. We shall also have members of the Nigerian Police Force attending the event. This is because of fraud, scam, ponzi schemes and how do you take part. This is basically what the event will be like. It’s going to be an interesting conversation for attendees. Because of COVID- 19, we will also be streaming the session online. It’s a conversation for everybody. It is a conversation everyone that needs to care about. It’s ahead of its time, because no one cares about digital currency as much as those of us in the tech space. Many don’t know about it, even those who are digital natives, they don’t know about cryptocurrency. It’s going to be a futuristic conversation that shows where the trajectory is going to in Nigeria, building the money of the future, how are we building the money of the future and what will be its impact.
Why are you holding the conference now, looking at the CBN ban?
We believe now is the most important time to have it. Before the ban, what we had been riding on was that people were adopting crypto in Nigeria. In fact, statistics showed that we were number two in the world in terms of trading volume. Three crypto exchanges alone traded up to $ 500 million in 2020. That is what we were riding on before the crypto ban. When the ban came, it brought another perspective to it.
Last year, SEC said it wanted to regulate crypto, they released a statement of intent; we felt it’s a good one as they could engage industry stakeholders, and we are aware that they engaged industry stakeholders. The question then was, if it should be regulated, how will the regulation be? But now, with crypto ban, it’s now what about regulations, what are regulatory questions that concerned crypto currency. Is crypto illegal in Nigeria?
CBN is scared of fraud and money laundering, but money laundering has been going on long
before crypto currency and whatever the crypto ban is going to do is actually going to encourage money laundering, this is because crypto exchanges are central but they are used to the old fashion way of decentralized exchanges.
The ban will be driving the people to the old fashion way of doing things, which is through the decentralised exchanges. If I kidnapped your loved one and I asked you to send crypto, how will you track it, if the exchange is that you’re disconnecting from the banking system and it’s not regulated, there is no connection, KYC or any requirement, how do you track that kind of transaction? On the contrary, rather than just driving them to the underworld, which seems like a self fulfilling prophecy, the CBN governor said crypto is money made out of thin air by criminals but separating them from the central banking system, you are telling these people to go to the whatsapp groups and telegrams groups.
The ban is likely not going to stop anything, this is because from the few crypto traders and stakeholders we have talked to, training is ongoing, withdrawals are ongoing, deposits are ongoing, and they are now using local bitcoin. If you’re building the money of the future, what are the regulatory questions that need to be asked, how do you engage regulators responsibly, how do you help them understand that rather than forcing an outright ban, it’s a case of regulation, know what we are doing and find a way to stop bad elements from using it to do bad things.
From a layman’s perspective, how do you define digital money?
That is one of the things we will be discussing at the event. It’s very difficult to define it to a layman. The easiest way to define cryptocurrency is digital money. Cryptocurrency is money that is posted on the computer- based system that is not regulated by any central bank or Federal Government. It’s posted on the computer based exchange over the Internet. In normal money, while you are exchanging from hand- to- hand, the digital currency exchange is over the Internet.
For one to be able to understand digital currency, one should be able to understand how money works, how fiat money works, how central bank creates money, is it just a piece of paper and they tell you it has value, how does money works exactly, I think this is where the conversation should start from.
We all say money is a legal tender, meaning something that is generally accepted, but at the end of the day this pen could be money if everybody accepts it. In the bible or Quran, animals were a measure of people’s wealth, in the same vein bitcoin or Ethereum, which is digital money posted on the computer, if it is widely accepted. One must first understand what money is, how it works, is the value of money tied to anything? In the 70s the value of money was tied to gold and after some time, dollar became the universal currency.