Firm to FG: establish regulatory framework for cryptocurrency – A South Africa-based digital banking financial institution operating in African countries, DafriBank Limited, has advised the Federal Government to embrace the value propositions in cryptocurrency and put in place regulatory framework to incorporate the technology into mainstream banking.
The bank’s managing executive, Dr. Edward Obasi, gave this advice in a statement sent to The Nation from South Africa following the Central Bank of Nigeria’s (CBN) directive to banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems.
The digital bank argued the CBN’s current action is similar to the earlier rejection of internet technology (www.com) which has taken over the world.
According to a circular on Friday, The CBN directed deposit money banks (DMBs), non-bank financial institutions (NBFIs), and other financial institutions (OFIs) to carry out the directive with immediate effect.
A cryptocurrency is a virtual or digital currency that appreciates or depreciates on the whims of market forces.
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But Dafribank reasoned that “given the outstanding benefits and use cases of digital currencies as an evolving technology, the rate of global adoption witnessed over the years is unprecedented, leading many countries and their regulators to come up with frameworks to incorporate crypto into their financial system.”
It added: “Since crypto has come to stay, all countries are encouraged to do a deep dive on its value propositions with a view to embracing it as well as coming up with regulatory framework to incorporate the technology into their mainstream banking. This is similar to the earlier rejection of internet technology (www.com) which has taken over the world.”
DafriBank is transforming the old commercial banking systems with its revolutionary digital banking model.
This digital-only bank is projected to begin operation in the third quarter of 2021 and will have physical presence in Nigeria and South Africa and envisions expanding to Kenya, Botswana, and Ghana, amongst more.
However, trading with Bitcoin–a cryptocurrency type–has gained traction globally and in Nigeria lately.
Most young people have been investing in the cryptocurrency world, buying and selling bitcoin and making profit for themselves.
But, in a statement issued by Bello Hassan, Director of Banking Supervision and Musa Jimoh, Director of Payments System Management Department, the CBN said: “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in crypto currencies or facilitating payments for cryptocurrency exchange is prohibited.
“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating crypto currency exchanges within their systems and ensure that such accounts are closed immediately.”