BY LEVI JOHNSON
Ex-Deputy Governor of the Central Bank of Nigeria, Kingsley Moghalu, has said that the Securities and Exchange Commission, SEC fully recognises the cryptocurrencies as financial assets,
Moghalu, who stated that if the main regulatory institution of the Nigerian capital market sees nothing wrong with the cryptocurrencies, what is the issue with the CBN.
SEC, which is supervised by the Federal Ministry of Finance, is the main regulatory institution of the Nigerian capital market.
Moghalu disclosed this on Monday while featuring on Arise TV.
According to him, “There is a regulatory dysfunction, there is a lack of regulatory coordination. The Securities and Exchange Commission recognises cryptocurrency as a financial asset and in September last year, they said they will be issuing a regulatory framework for it. So, it does look as if the right-hand does not know what the left hand is doing.”
Recall that the CBN had declared the cryptocurrencies illegal
However, Mr Moghalu posited that there was no means of exchange devoid of risk, stressing that if the CBN could manage the risks of paper currency and electronic payments and other means of exchange, it should also be able to mitigate the risks associated with digital platforms such as cryptocurrencies.
His words: “I can understand their (CBN) concern –criminality and fraud, but every medium of exchange is subject to fraud and criminality. This was why when I was in the Central Bank, I led the team that introduced the Bank Verification Number. It was to act as a unique identifier to improve the security and efficiency of the payment system.
“So, I don’t see why there should be the declaration of some sort of Third World War between the CBN and cryptocurrencies.”
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Moghalu also said some Central Banks all over the world were already adapting to cryptocurrency transactions because they recognise the inevitability of innovation. He, therefore, urged the apex bank to come up with the regulatory framework to monitor cryptocurrency transactions rather than restricts financial institutions from having anything to do with it.
He continues, “I would have preferred some deep thinking about some regulatory framework that restricts the use of cryptocurrency or subject it to some sort of surveillance that alerts the Central Bank if there are serious abuses that can affect the financial system stability.
“The bank has to be worried about the stability of our financial system and that is what its concern is. You have to be able to monitor to see whether the signs are coming up and you can stop trading or do other things.
“But an outright ban of financial institutions from having accounts associated with cryptocurrency exchanges or cryptocurrency trading wasn’t necessarily the best approach to the problem. That is what I think even though I understand why they have done it,” the ex-CBN deputy governor said.
“During the #EndSARS movement, Bitcoin and other cryptocurrencies were used to support the peaceful protests when the Central Bank started restricting access to the account of people who supported the protest which was a move I did not support. I’m not sure it is the business of the Central Bank to clamp down on peaceful protesters in the name of national security.
“If we are so concerned about counter-terrorism and terrorism financing, perhaps, it (CBN) should place a lot of efforts in finding the financiers of Boko Haram which is killing people in the North-East of the country. We have the tendency in Nigeria to be focused on the wrong things and to be chasing shadows.
