The Nigerian upper house has asked the Banking, Insurance & Other Financial Institutions Committee to examine the cryptocurrency market and appraise if investments in digital assets are feasible in two week period.
Nigeria is a significant bitcoin market in Africa. However, the country’s lawmakers are going to examine the bitcoin market which snowballed in 2017, thus turning Nigeria’s crypto market into the biggest on the continent. However, lawmakers still purport that bitcoin is both “unethical” and a “financial scam.”
The Nigerian Senate has asked the Central Bank of Nigeria, Financial Institutions, and regulators to “investigate the proliferation of bitcoin” and also educate citizens on risks involved with investing in cryptocurrencies.
Ike Ekweremadu, the Deputy Senate President, mentioned that the Senate Committee on Banking would “investigate the viability of bitcoin as a form of investment [and] come up with recommendations on how to control its uses and trade.”
The move was taken to safeguard its citizens from many of the fraudulent schemes spun throughout the sector. In the past, a Russian Ponzi scheme, Mavrodi Mundial Moneybox (MMM), built a frenzy among millions of Nigerians until meeting its end in 2016.
According to the Central Bank of Nigeria, victims of the scandal lost over $50 million in total. Consequently, bitcoin and its link with criminal activities and Ponzi schemes have besmirched the entire crypto space.
Bitcoin Investment is a Gamble
In an interview on January 24, 2018, Godwin Emefiele, the governor of the Central Bank of Nigeria Governor, said:
“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.”
Emefiele also hinted government’s plan to regulate the crypto market in the near future.
Legislators have also asked that Nigeria Deposit Insurance Corporation, Central Bank of Nigeria and Nigerian Central Bank of Nigerian Stock Exchange initiate a campaign to educate citizens on the risks of investing in cryptocurrencies.
Concluding, Nigeria is Africa’s biggest economy due to its huge reserves of petroleum products. After this, the West African country has also witnessed a boom in peer-to-peer transactions with the help of nascent virtual currencies. Globally, the Nigerian Naira ranks 24th in the Bitcoin market by national currency, only behind one African currency: the South African Rand (ZAR).
All of these features, plus promising talks regarding legislation, look to benefit an economy eager to join the digital era.
Will the Nigerian government put a hold on crypto trading?