The Central Bank of Nigeria, CBN, on Tuesday said its directive to banks to discontinue transactions on cryptocurrency was to protect Nigerians involved in transparent bank transactions.

The CBN’s Governor, Godwin Emefiele said this at an interactive session with members of Senate Joint Committees on Banking, Capital Market, and ICT.

Recall that, Senate had on February 11 at plenary mandated its joint committees to invite the CBN Governor, and Director General of Security and Exchange Commission, SEC, to brief the committee on circumstances leading to the banning on cryptocurrency transactions.

Addressing the lawmakers at an interactive session with stakeholders in financial institutions in the country, Mr. Emefiele in his presentation said:

“Let me state that this decision is in the best interest of every well-meaning Nigerian, who have nothing to hide and is happy to have traceable and transparent dealings in our financial system.”

He said cryptocurrency was a currency issued by largely unknown, unregulated elements using computers that are basically encrypted.

Consequently, he said transactions on cryptocurrency were designed to hide information about the transactions and the operators, adding the cryptocurrency model was created out of a thin air.

“Cryptocurrency is used to describe the activities of traders in an electronic dark world where transactions are extremely opaque, not visible and not transparent.

“These are people who deal in transactions that do not want to be trailed.

“The definitions of cryptocurrency was scary enough to scare anxiety for any regulator or Central Banker in any part of the world and that is the reason, virtually all regulators in the world did not recognise it.”

He said the CBN had been studying the development and paying close attention to currencies in that space since many Nigerians delved into its usage.

He said the CBN knows that a continuation of the transaction significantly threatens the safety and soundness of the nation’s collection system.

According to Mr. Emefiele, “CBN has a major and primary responsibility as a primary regulator to protect activities of actors, bank stakeholders and uninformed actors in the financial system from other actors who may wish to take advantage of their lack or limited knowledge to rip off the uninformed.

“And that is the reason we have banned all banks to desist from operating accounts for cryptocurrency dealers in Nigeria.

“We have also asked our banking supervision and payment system and our IT department to conduct an investigation into the activities of forex exchanges and their major players.

“The result of the investigation will lead to better understanding of their activities and will be unveiled to all.”

He further explained that crypto currency has been used to facilitate scam, money laundering, and payment of ransom for kidnapping, finance for terror in different parts of the world.

“Our business is to protect, to inform and ensure that those who seek protection in a regulated environment receive the protection,” he said.

He said a significant number of Central Banks around the world have taken the same position like CBN.

He, therefore, appealed to Nigerians to be patient with understanding as the CBN was monitoring the space.

This, he said, was to get a better understanding to enable CBN to keep protecting depositors, facilitating loans for the good of Nigeria and Nigerians.

Earlier, Chairman of the Joint Committee, Sen. Uba Sani, (APC Kaduna), who is also Chairman of the Senate Committee on Banking, said the interactive session was a fact-finding mission by the joint committee on the position of CBN on cryptocurrency ban.

He said the senate would support any legitimate drive of Nigerians and a decision designed to promote the economy.

He said the interactive session would help shield more light on the issue of the cryptocurrency ban.

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