Humanity will continue to live in appreciation of Information Communication Technology (ICT) as Fourth Revolution that demarcates us from from, Slavery, Agricultural and Industrial Revolutions respectively.
ICT is one of the great wonders that happened to Mankind for bringing so much demostrated changes with value additions to life.
Fundamentally, ICT has gone beyond just information and telecommunication to varieties of innovation in various aspects in.sayisfaction of human needs.
Significant breakthroughs in telemedicine, creative engineering, drone aviation and virtual education are attributed to ICT, let alone, its role in aiding economy growth, social interraction, networking and relations.
For instance, the system of exchange of goods and services has been transformed remakably,courtesy of ICT.
The same is with the financial, capital and commodity markets environment.
In the realm of economic dealings, which ICT birthed what we now call digital currency economy ICT has remarkably ushered us into a novel opportunity in digital currency and financial platform, leading to the introduction of Cryptocurrency and its allied digital currency, in addition to the varieties of digital coins and fintech services to deals on and make profits.
Unfortunately, the introduction and acceptance of this form of exchange has challenged the traditional mode of physical cash currency transaction and monetary dealings today.
Leading global financial monetary authorites such as the International Monetary Fund (IMF), the World Bank, and Central Banks of respective countries across the world acknowledge ICT innovations in the financial sector, advancing its services and cashless model.
cryptocurrency is founded on the platform of blockchain technology innovation, what monetarist economists consider to be in contrast with its role and essence of genuine trading system that require human interface, integrity and authority control.
Interestingly, cryptocurrency in recent times as recorded deals running into billions of dollars transactions, thereby, empowering individuals and groups with funds and transfer facilities of such billions of dollars across national borders without knowldge or control of monetary bodies.
Hence, the fear of crypto destabilizing establised status quo, causing financial crisis and wreaking havoc through crypto speculation for hot money profits.
This has reawaken monetary authorities in different countries to rise against crypto taking over physical finacial capital space and enroding principles.
Critically, the sovereign authority in charge of monetary policy in Nigeria has been up against cryptocurrency transaction in the country. The recent media report of CBN hammer of fines on three Deposit Money Banks(DMB’s) attracts a lot of reactionary views.
Moreso, that the apex bank action raised questions on the continous ban of cryptocurrency in the country, particularly, as the fine of N800 million against errant DMB’s facilitating cryptocurrency transactions calls to question the effectiveness of the ban.
Many of the members of the cryptocurrency and stakeholders question the CBN’s rationale behind it, which denied young Nigerians of an important source of employment and income to sustain themselves in the face of harsh economic realities.
Nevertheless, the apex bank assert it reasons, which primarily border on the illegality of crypto to serve as illicit financial medium to fund terrorism, drugs cartel and as well as forex speculations. Many Nigerians believe that the apex bank action deserves commendation.
The CBN, in an effort to tighten down on cryptocurrency has endured that DMBs restrictions on cryptocurrency trading are in place.
In a circular on 5th Febuary 2021, the apex bank warned Deposit Money Banks, Non-Financial Institutions and other financial institutions against engaging in Crypto and other digital transactions. The CBN specifically warned local financial institutions against having any transactions in crypto or facilitating payments for cryptocurrency exchanges.
The apex bank instructed the financial institutions to immediately “close the accounts of such persons or entities transacting in or operating cryptocurrency exchanges”.
To deter DMBs and other finanacial institutions from been sleazy, the apex bank placed on notice that any breaches to the directive “will attract severe regulatory sanctions and compliance is with immediate effect.”
Consequently, the media report that three DMBs failure to comply with the regulations of prohibiting some of their crypto customers from transacting in cryptocurrencies attract CBN hammers.
According to the report, Access Bank Plc, was fined N500 million;
United Bank for Africa Plc, N100 million naira; and Stanbic IBTC Bank, the local unit of Standard Bank Group Ltd., N200 million for two accounts allegedly used for crypto transactions.
In swift reactions to this development, one of the DMBs Chief Executive Officer claimed that, “the transactions for which it was sanctioned may have passed through its system undetected”.
He said the CBN was able to detect the relevant transactions “using advanced capacity” that Nigerian lenders do not have access to, appealing to the apex bank to share the technology with the DMBs.
It has been acknowledged that the CBN has the ability to detect cryptocurrency transactions that DMBs systems may lack capacity to detect. What cannot be ruled out, however, is the failure, neglegence as well as intended actions on the part of DMB”s to make profit from such illegal activities.We can’t rule out such adventures by cowboys and hyenas in the financial sector of Nigeria.
Having acknowledged the efficacy of ICT as the backbone to all innovations in the financial sector, we must also not lose focus on the inherent problems associated with it, especially with the introduction of cryptocurrency.
The CBN has been upscaling its monetary policies,even going as far as creating the e-naira digital platform. Nonetheless, it is accused of not engaging stakeholders in policy formulation before eventual implementations.
What needs to be done, therefore is first, a legislative drafting with input from all stakeholders should be consider by the CBN to stop all forms of illegal financial scam platform.
Secondly, CBN needs to create a platform for DMBs and other financian institutions to be more savvy in Fintect Intelligence in detecting illegal transactions in crypto and others, especially following the revelations that cryptocurrency players engage more through peer-to-peer transactions to bypass Nigerian banking system restrictions.
Lastly, there is a huge gap in media advocacy and sensitization on the illegality of crypto and others. The CBN should partner with the media and CSOs in this regards.
We call for due diligence from the apex bank to stay put on its mandate to mitigate all forms digital financial and banking scam, not just cryptocurrency transactions.
Olamilekan is Political Economiat and Development Researcher
Email:adefolarin77@gmail.com
Tel:08107407870,08073814436
