Lack of understanding of cryptocurrency’s technicality has pitched security agencies against digital currency traders
he umbrella body of cryptocurrency dealers in the country, Stakeholders in Blockchain Association of Nigeria (SIBAN), has condemned activities of the police against its members, noting that their harassments threaten the growth of the multibillion dollars global market in Nigeria.
President of the association, Mr. Paul Ezeafulukwe, who stated this, said even though trading in digital currency had not been declared illegal in the country, security agencies have been arresting its members for trading Bitcoin.
Speaking in an interview with our correspondent, Ezeafulukwe said the action of the security agencies was based on the wrong perception that Bitcoin is being used for fraudulent activities.
According to him, the wrong perception, which many Nigerians also hold, arose from the fact that many Nigerians first heard about Bitcoin through the popular Ponzi scheme, MMM.
He said the fact that internet fraudsters popularly known as Yahoo boys are using Bitcoin had further fuelled the aggressions against legitimate traders of cryptocurrencies in the country.
“I understand that people who are doing Yahoo are now using Bitcoin because they think that Bitcoin is not trackable. But it’s like saying because they also receive dollars through Western Union, that business is illegal.
“We want law enforcement agents to be critically objective towards the industry. Right now, even the IMF recognises bitcoin, some nations are taxing bitcoin transactions. And whether we like it or not, some expatriates now wire their money through cryptocurrencies. It is not illegal, it is a digital currency. So based on that, the earlier our law enforcement agencies understand this technicality, the better for them and for us,” he said.
According to him, government is already losing money through its indifferent attitude towards digital currencies as funds being repatriated through the currencies could have been taxed.
Although there was no outright ban, government, through the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC), had warned Nigerians against investments in the unregulated market, which is driven by blockchain technology. In spite of this, as of mid-2018, investment by Nigerians in cryptocurrency market was said to be in excess of $5 million. The Nigerian market was also adjudged to be the seventh-largest in the world in terms of peer-to-peer transactions by Local Bitcoins in 2018.
Checks also revealed that some Nigerian companies in partnership with foreign companies now have different cryptocurrency exchanges where the digital currencies are being traded.
However, to benefit from the digital currency market, SIBAN said the Nigerian government must begin to show serious interest. It added that rather than discoursing Nigerians from participating in the global currency market, the CBN should be conducting research on digital currencies to know how it will participate or regulate it like other countries of the world are currently doing.
Ezeafulukwe said the government needed to sit down with the experts to get an understanding of how blockchain technology can help the economy.
“I expect that by now, the government should have pushed the private sector to form a stable coin, which the country can use in place of dollars. We can only have dollar as our reserve, but we can use stable coins to give to our traders who go to China, America, and Europe to trade. And over time, we can back it up by oil or we can even back it up by gold we can back it up by so many currencies, all those are possibilities on the blockchain technology,” he said.