CBN May Legalise Use of Bitcoin for Transactions, Says NDIC...

The Managing Director of the Nigeria Deposit Insurance Commission (NDIC), Alhaji Umaru Ibrahim, at the weekend disclosed that the commission and the Central Bank of Nigeria (CBN) have set up a committee to look into the possibility of legalising the use of the digital currency, the Bitcoin, for transactions.

According to Bitcoin.org, Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. The website says Bitcoin is an open-source, its design is public, nobody owns or controls Bitcoin and everyone can take part.

Unlike traditional currencies such as dollars, naira, the euro, etc., bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin.

As such, it is more resistant to wild inflation, devaluation, import policies, currency fixing and corrupt banks. It is a true floating currency whose value is determined by demand and supply.

According to the News Agency of Nigeria (NAN), Ibrahim made the remark on the use of bitcoins for digital transactions at the 2016 Workshop for Financial Correspondents in Kaduna.

He said: “On our part, we have constituted a committee together with the central bank to have an in depth study of this phenomenal bitcoin.

“We will look at its advantages and disadvantages, what it means for the payment system and what it means for the safety and security of customers.

“We will also look at what it means for money laundering, anticorruption, crime and measurement of money/near money instruments for the economy.

“But we need a lot of education to do this and I’m calling on you (the media) to educate yourselves about all of this so you can educate the public.”

Ibrahim said with the bitcoin, it has included block-chain technology-based products in the market.

He said a lot of Nigerians had already started patronising the digital currency, stressing that ‘it has started to creep in and nobody can stop it”.

In Europe and the United States, Ibrahim noted, it has gained currency and some of the leading banks in Europe have also adopted their own versions of bitcoins.

“Some of the central banks have also adopted it and are seriously doing everything possible to bring in the emergence of this invisible product.

“The owners do not need any central bank; they do not need any physical bank.

“If you are a subscriber, you only know yourselves and they give you the bitcoin and in some countries, you can convert it to cash.

“You can make payments with it because it has been recognised and one of the famous ex-chief executives of Barclays PLC, Antony Jenkins, has joined the network’s board of directors,” Ibrahim explained.

He said that the financial services industry was not spared in the transition to the adoption of the digital currency.

On the issue of “MMM”, he stressed that it was not recognised and was illegal. “It is a very serious matter and all hands must be on deck to educate the public on things like this.”

On the current problems regarding the emergence of wonder banks, Ibrahim said NDIC would not relent in calling on Nigerians, educating and sensitising Nigerians on the dangers of patronising wonder banks.

He urged the media to help and continue to educate the public not to in anyway patronise institutions that are not licenced by the central bank or insured by the NDIC.

He also spoke on improving financial inclusion in the country, saying that although the success recorded was not considerable, there was some improvement.

“The successes recorded are not much, but it is a good start given the prevailing number of Nigerians excluded financially,

“I think if you check the statistics that have been rolled out, you will appreciate that we have recorded some successes in the last three years.

“This is since the introduction of the cashless policy and mobile banking to the extent that more Nigerians are getting involved.

“But we still have a very long way to go and it is your responsibility, as journalists, to continue to help to educate Nigerians on the advantages of people not keeping money under their pillows and mattresses or in some cases in soakaways and ceilings.

“We know that people fear electronic fraud, but I can assure you that the CBN and the banking community are doing everything possible to block all loop holes associated with mobile banking. And the advantages far out weighs the disadvantages,” he said.