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CBN and global instability, vulnerability of cryptocurrencies




When in February, the Central Bank of Nigeria (CBN) directed banks and other financial institutions to cease transactions in cryptocurrencies and facilitating payment for cryptocurrency exchanges, several stakeholders raised concern about the directive.

In the memo, dated February 5, the apex bank instructed banks and other financial institutions to identify individuals or entities that transact in cryptocurrency or operate cryptocurrency exchanges and close their accounts.

The memo was sequel to an earlier 2017 warning by the CBN that cryptocurrencies were not legal tender and that investors were unprotected. It explained that cryptocurrencies transaction was devoid of proper regulation and prone to financial crimes.

In spite of assurance by the CBN Governor, Mr Godwin Emefiele, that the directive was not inimical to the development of technology-driven payment system in Nigeria, many stakeholders still kicked against it.

They urged the apex bank to revisit the ban and see digital currencies as a tool for economic growth.

Emefiele had explained that the Nigerian payment system had evolved significantly over the past decade, boosted by reforms driven by the CBN, adding that cryptocurrency had no place in the Nigerian monetary system.

Sometime in May, the price of Bitcoin, which is the most popular cryptocurrency, fell drastically, after China imposed fresh restrictions. China had earlier banned banks and payment firms from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading.

Crypto-currency trading has been illegal in China since 2019 in order to curb money-laundering, but people were still able to trade in currencies such as Bitcoin online.

Mr Elon Musk, Chief Executive Officer, (CEO) of Tesla, an auto manufacturer, was also accused by stakeholders of contributing to the fall in value of cryptocurrencies.

After his electric car company invested 1.5 billion dollars in Bitcoin in February, and assuring consumers that he would accept Bitcoin as payment for Tesla cars, Musk reversed that decision, citing the environmental effects of mining new coins.

This further resulted in a fall in Bitcoin of more than 10 per cent. Meanwhile, other digital currencies such as Ether, which acts as the fuel for the Ethereum blockchain network, and Dogecoin also plummeted in value.

Early in the week, Bitcoin jumped past 30,000 dollars as Elon Musk said Tesla is “most likely” to start accepting it as payment again.

This instability in value, and vulnerability to policy decisions from both state and non-state actors further accentuated the high risk involved in cryptocurrency. It also vindicated the idea by CBN to suspend its transactions in the Nigerian banking system.

Many countries are yet to come up with effective and efficient means of regulating the cryptocurrency space conceived to be a money laundering den and a tool for terrorists.

Due to the anonymous mode of transactions of these currencies, the world’s biggest criminal groups seem to have made them convenient and global source for laundering money.

Meanwhile, the CBN has assured Nigerians that it would soon create its own, more secure digital currency.

Emefiele said this while addressing journalists after the last meeting of the Monetary Policy Committee (MPC) in May.

He said that the idea of a digital currency would soon become a reality in the country, and that the central bank had already set up a committee, which is working on the concept.

CBN’s Director, Information Technology Department, Mrs Rakiya Muhammed, at the end of the meeting explained that the Bank had been conducting research in regards to central bank digital currencies since 2017 and may conduct a proof of concept before the end of the year.

“Currently, there are two currencies, notes and coins. The CBN’s digital currency will be a third type of currency to supplement cash. Rather than carry cash about, digital currency lodges the money in a mobile phone,” she said.

Citing a recent report which indicated that Nigeria was at about 60 per cent in financial inclusion, she explained that the proposed CBN digital currency would enhance the inclusion drive, reduce the cost of cash management as well as enable innovations in the nation’s financial market.

The director noted that, with a target of 80 per cent at the end of the year, such a step needed to be taken to raise the percentage of the nation’s financial inclusion.

She added that a central governance structure would be set up to address all associated risks with a view to ensuring that the Nigerian public got the best technology for the digital currency.

Also, Director General of Securities and Exchange Commission (SEC), Lamido Yuguda, revealed that SEC was working with the CBN for a better understanding and regulation of cryptocurrencies in the country.

Analysts expressed confidence that a collaborative effort by the CBN and SEC would go a long way to deliver a safe digital currency platform in the country.

As the frailties and instability in cryptocurrency investment continue to manifest across the globe, and as more countries continue to take more stringent steps to restrict and regulate its transactions, stakeholders are commending the CBN for having the foresight to blaze the trail in identifying inherent dangers in cryptocurrency and restricting its transactions.

CBN’s move tallies with the thoughts of policymakers around the world, who have been considering the idea of central banks issuing their own digital currencies, called Central Bank Digital Currencies (CBDCs) and to be made available to everyone, rather than just to licensed commercial banks.

Analysts agree that a national digital currency managed on a single network could allow money to change hands almost instantly like in crypto transactions, but in a more secure business environment.
***If used, please credit the writer and the News Agency of Nigeria (NAN)

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SON insist on international best practices, set-up committee to audit, certify education sector




In ensuring that educational management system in the country deliver on their mandate of impacting knowledge and skills, the Standards Organization of Nigeria (SON) has inaugurated national technical committee for adoption and certification of education management standards.

At the inauguration in Abuja, Farouk Salim, Director General of SON, said one of the challenges facing Nigeria has been international standards both in products and services delivery, which is why the organisation is aligning to best international practice.

“One of SON mandate is to support all businesses in determining quality of products/services using ; standardization, certifications and quality assurance. As such our decision to adopt this international standard on educational organizations management system ISO 21001:2018 is apt at this time when we have opened our borders to all forms of trade with other African countries.

“It is important that we promote and sustain our learning institutions by ensuring that the services that are provided in our schools meet the needs of learners, promote equal opportunities for all students and earn the confidence and approval of learners’ sponsors in order to contribute their quota to national growth and development,” he said.

Salim, represented by Engr. Timothy Abner, Director Training services at the SON added that although government is doing a lot to upgrade the standard of products and the education sector, he however also noted there should be additional effort of adopting and establishing this international best practice will assist Nigeria to always deliver globally recognized services and products in different sectors of the economy.

The Committee is to draw up requirements for bodies providing audit and certification of educational organizations management systems.

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Business & Economy

Senate summons CBN Governor over naira fall



Senate in Session


…proceeds on annual recess till Sept. 20 
The Senate, on Wednesday, resolved to summon the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, to educate and inform senators in a closed session on the reasons for the rapid depreciation of the value of the naira.
It also mandated the Senate Committee on Banking, Insurance and Other Financial Institutions to assess the impact of CBN intervention funds meant to support critical sectors of the economy.
The resolutions were reached by lawmakers after the upper chamber considered a motion sponsored by Senator Olubunmi Adetunmbi (APC – Ekiti North).
The motion was entitled, “State of CBN Intervention Funds and Free Fall Of Naira.”
Coming under Order 41 and 51 of the Senate Standing Order, as amended, Adetunmbi bemoaned Nigeria’s economic reality amid an urgent call for “extraordinary measures”.
He noted that the CBN through its numerous multi-sectoral intervention funds, provided special funds to support critical sectors of the economy.
He explained that in view of such interventions, it had become necessary to assess the state of implementation and effectiveness of the funds deployed for the purpose.
The lawmaker, recalled that the CBN in 2021, placed an indefinite halt on forex bidding by Bureau de Change operators (BDCS) and importers over allegations of abuse and mismanagement.
He observed that the halt by the CBN resulted in a spike of the exchange rate.
According to Adetunmbi, “the two instruments of Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) could only serve less than 20% of the total forex demand by travelers and businesses.”
He expressed worry that the import and export window meant to serve the forex needs of business giants, “has become a rare opportunity that only a privileged few can access.”
“These and a number of others have contributed to the excessive scarcity of forex in Nigeria today”, he added.
He noted that as at the 26th of July 2022 (yesterday), the exchange rate in the autonomous segment (BDCS) of the foreign exchange market is N670 to 1 United States Dollar and projected to end at N1000 by end of the year based on the current rate of depreciation.
He, therefore, advised the Central Bank to take new measures to curb forex scarcity and address the sliding rate of Naira exchange.
In his contribution, Senator Sani Musa (APC – Niger East), faulted the Central Bank’s decision to halt foreign exchange biddings, thereby cutting off the parallel market – Bureau de change operators.
According to him, the attempt by the CBN to control the value of the naira with the continuous exclusion of BDCs would only lead to its further depreciation.
He, therefore, advised the apex bank to rather ensure the regulation and monitoring of the parallel market.
“What CBN used to do was to give out $10,000 (USD) to each of these BDCs with a clear directive for it not to be sold above N470 as against the $419 exchange rate. It worked.
“But today, nobody is determining where the rate is going and I can assure you we can’t have that solution because we are only importing”, he said.
On his part, Senator representing Katsina North District, Senator Ahmad Babba-Kaita, said one way to improve the value of the naira was to encourage foreign investments to attract inflow of other currencies into Nigeria.
“The only way we can access the dollar will be determined by other economies and not ours”, he noted.
He, however, attributed the lack of foreign investments into Nigeria on the poor security situation caused by banditry, terrorism and other criminal activities.
The Senate, in its resolutions, called on the CBN to urgently intervene to stop the rapid decline in the value of the Naira vis-à-vis the Dollar and other international currencies.
It also mandated the Senate Committee on Banking, Insurance and Other Financial Institutions to conduct an assessment of CBN intervention funds and the declining value of Naira to come up with sustainable solutions.
The Senate, at the end of Wednesday’s proceedings, adjourned plenary till September 20th, 2022, for its annual recess.
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Business & Economy

Buhari seeks Senate’s nod on four re-appointed nominees as Directors of CBN board



CBN Headquarters Abuja
CBN Headquarters Abuja


The Senate, on Tuesday, received a request from President Muhammadu Buhari, to confirm the re-appointment of four nominees as Non-Executive Directors of the Board of the Central Bank of Nigeria.

The request was contained in a latter dated 21st July, 2022, and read at the start of plenary by the Senate President, Ahmad Lawan.

The President, in the letter, explained that the request to confirm the nominees was made in accordance with Section 10(3)(a) of the Central Bank of Nigeria (Establishment) Act 2007.

The nominees for confirmation include: Prof. Mike Idiahi Obadan (South South), Prof. Justitia Odinakachukwu Nnabuko (South East), Prof. Ummu Ahmed Jalingo (North East), and Mr. Adeola Adetunji (South West).

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