Business 26 September 2017

Dan Taylor

Nigerian Central Bank preparing cryptocurrency white paper

The Nigerian central bank has announced it is preparing a new research paper into cryptocurrencies and the blockchain, as it becomes the latest central bank to examine the technologies more closely.

According to media reports this week, the bank’s Deputy Director, Musa Jimoh unveiled the plans at a blockchain conference in Lagos, where it was suggested that the Central Bank of Nigeria would turn an increasing focus on the rise of cryptocurrencies and potential use cases for blockchain technology.

Crucially, he noted the bank’s reasoning for the study, suggesting they “cannot stop the tide of waves generated by the blockchain technology and its derivatives”, a recognition of the need for regulators to adapt to changing market conditions.

His comments have been deemed particularly significant in light of the current trend towards increasing regulation globally, with the Central Bank of Nigeria specifically tasked with regulating both banking and financial sectors, as well as setting the monetary policy agenda.

The white paper will investigate a plethora of issues around the rise of cryptocurrencies, and aims to better equip the central bank to respond to the growing challenges and opportunities posed by the technologies.

Nigerian regulators, including the Central Bank, have already voiced concern about some of the potential pitfalls for investors in engaging with currently unregulated operators in the space. Earlier this year, the Nigerian SEC joined the fray, making its concerns about some operators public.

“The Commission wishes to alert the public that none of the persons, companies or entities promoting cryptocurrencies has been recognized or authorized by it or by other regulatory agencies in Nigeria to receive deposits from the public or to provide any investment or other financial services in or from Nigeria.”

Elsewhere, sentiment at the Lagos conference was generally positive, with delegates pointing to a number of local success stories amongst fintech developers and early proponents of the underlying blockchain technology.

Dr. David Isiawe of the Information Security Society of Nigeria summed up the general feeling amongst delegates when he described the inevitability of the march to prominence of blockchain technologies, “whether we like it or not.”

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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