*It is crucial for all stakeholders to view each player as a key teammate towards a healthy crypto space in Nigeria, says Prince Clem Ikanade Agba, Minister of State for Budget and National Planning

*Regulation is absolutely important for this sector. If people are using this as an investment asset, then the rules which are there for other investment classes should apply here as well

Isola Moses | ConsumerConnect

In lieu of outright clampdown on crypto activities, accounts and transactions  in the West African country, a serving Minister in the Nigerian Government has urged the relevant authorities to consider regulating cryptocurrencies.

ConsumerConnect had reported the Central Bank of Nigeria (CBN) repeatedly stresses its stance on cryptocurrencies, that the country’s law does not stipulate regulation of cryptos in the economy.

However, Prince Clem Ikanade Agba, Honourable Minister of State for Budget and National Planning, has called for the regulation of cryptocurrencies.

The Minister contended that rather than clamp down on tech start-up firms that facilitate cryptocurrency transactions, forward-thinking regulation would prove more beneficial for Nigeria in the payments system ecosystem.

Agba, in his remarks published by Bloomberg, was reported to have appeared to question the claim that the CBN has the right to regulate cryptocurrencies, when in fact there is no law giving any regulatory body such a mandate in the country.

He stated: “Since our existing laws cannot explicitly stipulate who holds the power to regulate cryptocurrencies, there may be a need for an additional body to play that role.”

Prior to the CBN’s directive February 5, 2021, the Nigerian Securities and Exchange Commission (SEC) and the CBN reportedly competed for the control of cryptocurrencies. The Nigerian SEC had designated cryptocurrencies as securities in its crypto guidelines document, report said.

Nevertheless, after the Bankers’ Bank had directed banks to block cryptocurrency entities’ access to the financial system, the SEC also announced that it had suspended the guidelines.

Ever since then, the CBN now appears to be the only Nigerian regulator that is overseeing the country’s cryptocurrency industry, according to report.

While emphasising that all stakeholders are key players, the Minister said: “It is crucial for all stakeholders to view each player as a key teammate toward a healthy crypto space in Nigeria.”

Despite the CBN’s unrelenting fight against cryptocurrencies, Nigerians have continued to use and demand the assets, as a recent report recently described Nigeria as one of the leading countries with the largest number of cryptocurrency investors in the world.

Similarly, a Finder survey October 2021 also indicated that the country has the highest rate of cryptocurrency ownership globally, Bitcoin.com report said.

‘Regulation is absolutely important’ for crypto sector: IMF Chief Economist

In a related development, Gita Gopinath, Chief Economist at the International Monetary Fund (IMF) has said that regulation is “absolutely important” for the crypto sector.

Gopinath said that banning cryptocurrencies, like what India could be considering doing, would pose practical challenges, given their decentralised nature in the global economy.

In respect of regulation of the cryptocurrency sector, the IMF Chief Economist, who is also the IMF’s Economic Counsellor and Director of Research Department, discussed cryptocurrency Wednesday, December 15, 2021, at an event organised by the National Council of Applied Economic Research (NCAER).

“It would seem that cryptocurrencies are more attractive for emerging markets compared to developed economies.

“Cryptocurrencies are a particular challenge for emerging markets.

“Emerging markets have exchange rate controls, capital flow controls, and cryptocurrencies can impact that,” she opined.

According to Gopinath, regulation is absolutely important for the crypto sector.

The IMF chief further noted if people are using this as an investment asset, then the rules which are there for other investment classes should apply here as well.

Toeing the line of Nigerian Minister Ogah on the need for regulation for cryptocurrencies, she also stated that banning cryptocurrencies would pose practical challenges, given their decentralised nature, as she emphasised the need for a global policy on cryptocurrency.

Recall the IMF recently outlined some recommendations of how cryptocurrency should be regulated.

The Fund said that there is an urgent need for cross-border collaboration and cooperation on cryptocurrency regulation.

The authors in the recommndations said, “crypto assets are potentially changing the international monetary and financial system in profound ways.”

The IMF also warned El Salvador November 2021 against using Bitcoin as a national currency.

The country made Bitcoin legal tender alongside the US Dollar September this year, and has purchased 1,370 Bitcoins for its treasury.

Gopinath is on leave of public service from Harvard University’s economics department where she is the John Zwaanstra professor of international studies and of economics.

The Chief Economist is slated to be the first Deputy Managing Director of the IMF early 2022.