Emefiele’s warning is coming on the heels of increasing transactions in cryptocurrencies in Nigeria. Data from LocalBitcoins, a Bitcoin start-up company, showed that Nigeria came second in the world’s peer-to-peer (P2P) Bitcoin transactions last year outpacing major European countries, the United Kingdom and the United States of America. Emefiele however warned that:
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“Cryptocurrency or bitcoin is like a gamble, and there is a need for everybody to be very careful. We cannot as a Central Bank give support to situations where people risk savings to ‘gamble’.
Cryptocurrencies are not issued or backed by any bank or government, nor are individual digital currency valuable as a commodity. Cryptocurrency are traded on online exchanges and transferred anywhere in the world, allowing holders to skirt currency controls. Emefiele’s warning is consistent with a circular issued by the CBN last year, warning banks and other Financial Institutions (OFLs) not to use, hold, or trade digital currencies. It cautioned financial institutions to ensure that digital exchange customers must have effective Anti-Money Laundering/ Combating The Financing of Terrorism (AML/CFT) controls to enable them comply with customer identification, verification and transaction monitoring requirements. Similarly, the Securities and Exchange Commission (SEC), issued a statement last year, advising Nigerians to exercise extreme caution with regard to using digital currency as a vehicle of investment. On the possibility of future regulation of cryptocurrency, Emefiele said,
“I have asked my colleagues in the research and monetary-policy department to study the market and get to know what the issues are. The Central Bank may in future make some very concrete pronouncements as to the direction.”
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