Cryptocurrency Ban : Senate Summons CBN Governor, DG SEC

Two government entities, the Central Bank of Nigeria and the Securities and Exchange Commission, were ordered to testify on the crypto ban before the senate.

The Senate directed the Governor of the Central Bank and the Director-General of the Securities and Exchange Commission to appear before it over reports banning the country’s cryptocurrencies.

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The Senate has now ordered its Banking, Insurance and Other Financial Services, ICT and Cybercrime and Capital Market Committees to obtain a briefing from Godwin Emefiele and Lamido Yuguda, the heads of the two government institutions, respectively.

The Senate clarified that the details that would come from the two regulatory bodies’ briefings would help it “determine the cryptocurrency’s possibilities and threats to the economy and security of the nation.”

This resolution of the upper chamber followed its consideration at the plenary session of a motion entitled: “CBN Decision to Stop Financial Institutions from Transacting in Cryptocurrencies and Issues Arising From It.”

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Senator Istifanus Dung Gyang, (Plateau North) and Senator Adetokumbo Mukhail Abiru, (Plateau North) supported the motion (Lagos East).

Senator Gyang, who proposed the motion, urged his colleagues to remember that the CBN has released a guideline banning crypto-currency transactions by all financial institutions.

“He said that in January, 2017 and February 2020, the apex bank directive was a follow-up to its previous directives that “forbade banks not to use, keep, trade and/or trade in cryptocurrencies.

He further told the Senate that the CBN decision was said to have been focused on the need to safeguard the Nigerian economy from the adverse effects of the “unregulated digital or virtual currencies issued by anonymous entities and secured by cryptography” cryptocurrency regime.

He noted that cryptography is a “method of encrypting and hiding codes preventing oversight, accountability and regulation, according to which the CBN claims that its use in Nigeria violates and contravenes existing law as only the CBN is authorised by law to issue legal tender.”

He added: “Concerned that Crypto currency is by nature anchored on the anonymity, obscurity and concealment of its patrons and actors, making it difficult, if not impossible, to trace, track and uncover those who can deploy it for unwise and illegal use such as money laundering, financing terrorism, purchasing drugs, cybercrime, etc.”

“Aware that the CBN’s action and directive has drawn sharp reactions from Nigerians and has become a hot topic of national debate; and

“Realized that the cryptocurrency is both an opportunity and a threat, the Senate is therefore responsible for ensuring that the nation and citizens do not miss the opportunities offered by the cryptocurrency and, in the same vein, mitigate and avoid likely consequences for the economy and security of the nation.”

In their contributions, the Senators endorsed the motion.

The only prayer on the motion was approved by senators when Senate President Ahmad Lawan put it to a vote.

The Joint Committee was given two weeks to report back to the Senate President’s plenary session.