Nigeria’s central bank is undergoing a significant shift in its stance towards cryptocurrencies. The bank is reportedly not only researching blockchain technology but also contemplating the introduction of its own digital currency.
This represents a significant turn around from January 2017 when the Central Bank of Nigeria (CBN) issued a stern warning against virtual currencies to banks and other financial entities across the nation. Alongside this, The Nigerian capital market regulator also issued an advisory urging the public to resist from investing in cryptocurrencies, including Bitcoin.
According to a recent report from The Guardian, the CBN is now investing in resources and manpower to understand and explore digital currencies and the underlying blockchain technology. While delivering a talk at a recent cryptocurrency conference in Lagos, the central bank’s Deputy Director Musa Jimoh revealed that the central bank is in the process of drafting a white paper on cryptocurrencies.
Jimoh’s comments mark a significant acknowledgement from a central bank official. He acknowledged the inevitable wave that blockchain technology and associated digital currencies have created, revealing, “[The CBN] cannot stop the tide of waves generated by the blockchain technology and its derivatives. Currently, we have taken measures to create four departments in the institution that are looking forward to harmonizing the white paper on cryptocurrency.”
This startling shift in the CBN’s stance is underscored by their previous skepticism and ‘caution’ towards digital currencies. They’ve transitioned from a skeptical viewpoint after realizing the value of “decentralized cryptocurrencies such as Bitcoin, that now provide an outlet for personal wealth that is beyond restriction and confiscation.”
Addressing the conference, the head of Nigeria’s cyberspace watchdog vouched for the undeniable reality of blockchain technology and cryptocurrencies, terming them as “facts that we must face, whether we like it or not.” Encouraging Nigeria to proactively accept and integrate this decentralized technology, he called for its widespread adoption within society.
Many other conference speakers labeled blockchain, the foundation for cryptocurrencies, as the ‘technology of the future’. They predicted its potential to vastly transform society through its incorporation across a multitude of sectors.
With its new openness to these digital currencies, Nigeria’s Central Bank stands poised on the edge of a brave new world. This fundamental shift may well alter the financial landscape of the nation, and may also inspire other African central banks to follow suit.
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