Ban on crypto sets back digital economy.


The recent restriction on cryptocurrency by the Central Bank of Nigeria has sparked debate amongts Nigerian about the effects of the restriction on Nigeria digital economy.

Cryptocurrencies operate on the blockchain technology which is a growing list of records called blocks, which are linked using cryptography. Each block contains a cryptographic hash (a string of numbers and letters) of the previous block, a timestamp, and transaction data.

The CBN has cited a lack of regulation in the system, amongst other issues, as its main reason for banning its use in Nigeria, in spite of its going against the objective of the National Digital Economy Policy and Strategy.

The policy, championed by the Ministry of Communications and Digital Economy, provides the National Information Technology Development Agency (NITDA) with the mandate of developing a strategy for the adoption, implementation and possible regulation for the blockchain industry in Nigeria.

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NITDA, which is the apex regulator for Information Technology in Nigeria, has the responsibility of creating frameworks for the planning, research, development, standardization, application, monitoring, evaluation and regulation of all Technology practices in Nigeria

Earlier in November 2020, the agency held its Stakeholder Engagement for the Review of the National Blockchain Adoption Strategy. NITDA Director-General Mallam Kashifu Abdullahi mentioned at the conference that the government is interested in harnessing the potentials of the Blockchain industry.

He said that Nigeria in 2030 will begin to make an average of N10 billion if the industry is taken seriously. ‘Looking at our youthful population, which is mainly digitally native and our strategic position in Africa, we are looking at how we can get at least around $10 billion from this by the year 2030, and this is doable looking at our strategic and huge payment and financial services sector.

‘Nigeria is already one of the hottest places when it comes to tapping from this. We are coming up with a strategy that will help Nigeria to capture value from the financial services from land administration, from education, and from healthcare because Blockchain is going to play a key role in terms of breaking and tracing products and services,’ he said.

This progress was welcome by many Nigerians at the time as people saw the blockchain space as the best way of diversifying the economy from its sole dependence on petrol products.

Nigeria as of now stands as the second-largest market for cryptocurrencies worldwide and it will be interesting to see what further moves the CBN may take following the backlash.

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