Central Bank of Nigeria (CBN), which doesn’t recognize cryptos as legal tender are getting requests from the country’s Fintech startups to provide legal guidelines for the cryptocurrency and blockchain industry. The Electronic Payment Practitioners Association of Nigeria (E-ppan) say that these lack of regulations are driving potential investments away from the continent.

E-ppan is a broad-based fintech industry representative body with ties to the Nigerian central bank, particularly “on regulations that govern the electronic payments industry.” Ade Atobatele, a member of the entity says:

“Investments in blockchain-based financial services such as cryptocurrency are today going to Rwanda and Malta, which have provided regulatory frameworks that guide operators of the technology.”

Even though the governor of CBN, Godwin Emifiele is not a big supporter of cryptos, the country’s parliament has probed an inquiry to figure the pros and cons of crypto-based payment. The population of the country accounts for the world’s third largest holdings of bitcoin, as a percentage of GDP, after Russia and New Zealand.

As the use of cryptocurrencies gains momentum, African central banks, gripped by crypto-phobia, are pressing panic buttons, with some taking the easy way out by banning the use and trading in cryptocurrencies in their territories.They do not recognize cryptocurrencies as money, mediums of exchange or legal tender. They link cryptocurrencies to price volatility, fraud, money laundering, tax evasion, exchange control circumventions, terrorism financing and other criminal activities fueling illicit financial transactions.

African central banks have convulsed, issuing a plethora of warnings against the use of cryptocurrencies while others have gone to extremes, outright banning trading in them – an easier way out of what they perceive as the ‘crypto-quagmire’. According to a public notice issued by Adikwu Igoche, Manager, Research Development at Nigeria Deposit Insurance Corporation (NDIC), cryptocurrencies are not recognized as currency in Nigeria as they do not belong to the category of currencies or coins issued by the Central Bank of Nigeria (CBN).

Africans are becoming attracted to cryptocurrencies not only as speculative investments but as an alternative and cheaper payment and settlement methods, conduits for capital investments and options for savings and storing value as most African fiat currencies are very volatile and unstable and do not hold value against major currencies such as the US dollar.

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