Massive Shift to USD(X) Stablecoin Expected as CBN Stops the Sell of FX to BDC Operators
Massive Shift to USD(X) Stablecoin BDC Expected.
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Central Bank of Nigeria’s governor , Godwin Emefiele has announced the placement of embargo on the weekly sale of foreign exchange to Bureau De Change operators.
CBN made this known on Tuesday while speaking to journalists on the result of the Monetary Policy Committee (MPC) meeting in Abuja, the nation’s capital.
On the reason for the ban, the CBN governor said, “we have noted with disappointment and great concerns that our Bureau De Change operators have abandoned the original objective of their establishment which was to serve retail end users who need $5,000 or less.”
Going further , he pointed out the illegality of BDCs operations, ” instead, they have become illegal wholesale dealers in foreign exchange to the tune of millions of dollars per transaction.”
The governor also accused BDC operators of facilitating financial corruption, illicit cash flows and money laundering. He sounded a note of warming to Commerical banks who connive with BDC operators to facilitate illegal forex sail, noting that the regulatory bank with deal heavily with such bank.
Despite the fact that Nigeria is the only country in the world today where a central bank sells dollars directly to Bureau De Change operators, operators in the Nigerian Bureau De Change segment have not reciprocated the bank’s gesture to help maintain price stability in that market.
“Given this behaviour, it is not surprising that since the CBN began to sell foreign exchange to Bureau De Change, the number of operators has risen from a mere 74 in 2005 to over 2,700 in 2016 – and almost 5,500 BDCs as of today (July 27, 2021),” Emefiele said.
On the other hand, Cryptocurrency enthusiasts in Nigeria has said that the new policy on Forex may lead to a massive Shift to USD Stablecoin. P2P Crypto transactions volumes in Nigeria has continued to grow exponentially since the apex bank banned banks from engaging in cryptocurrency payments.
Abafor Chima a Nigeria blockchain expert and co-founder of fintech payment app xdeng said that ” Now we’ll see a massive shift from fiat-based BDCs to USD(X) stablecoin BDCs that don’t need license. The P2P volumes you’ve been hearing about will be a joke compared to what will happen when this takes off.”