The Central Bank of Nigeria is reportedly exploring the potential of blockchain technology and its application in various sectors. This represents a fundamental shift in the regulator’s position after its earlier announcement this year, cautioning the public against trading in digital currencies, and prohibiting banks from holding any cryptocurrency reserves.
Nigeria now joins a number of African nations such as Kenya where regulators have warned against the use of bitcoin but are open to blockchain technology and its possible uses.
The Nigerian Central Bank is Now Exploring Blockchain Technology
In January 2017, the Nigerian capital markets regulator informed the public to be wary of speculating with digital currencies such as bitcoin. The Nigerian bitcoin space has witnessed tremendous growth over the last few years, which has been mainly driven by people looking to hedge their wealth in the face of a depreciating local currency, the naira. Other reasons for the high bitcoin adoption rate include bitcoin’s use as an effective medium for cross-border remittances and as a potentially profitable investment.
Therefore, it was no surprise the Central Bank of Nigeria’s (CBN) notices caused some confusion and uncertainty among the local bitcoin community. However, it appears things may be looking up for bitcoin in Nigeria going by a recent report from the Guardian. According to the report, the CBN is actively working on a whitepaper on digital currencies and its underlying technology the blockchain. The institution has already allocated personnel and resources towards the study of virtual currencies.
Speaking at a recent cryptocurrency conference in Lagos, the central bank’s deputy director, Musa Jimoh acknowledged the central bank was softening its stance on digital currencies and saw it as a decentralised outlet for personal wealth that is free from interference and confiscation. He added,
“[The CNB] cannot stop the tide of waves generated by the blockchain technology and its derivatives. Currently, we have taken measures to create four departments in the institution that are looking forward to harmonise the white paper on cryptocurrency.”
The Blockchain is the Future
Chimezie Chuta, organiser of the Blockchain Nigeria Conference 2017, stressed the need for young people to learn more about blockchain technology and maximise on employment opportunities that will arise with as more companies start experimenting with the distributed ledger technology. He pointed out smart contracts, healthcare, identity management, and e-voting as areas that could particularly benefit from blockchain-based solutions.
The head of Nigeria’s cybersecurity agency, Dr. David Isiawe, added:
“The impact of the emergence of blockchain and cryptocurrency will be felt in the nation just as in the global community. Nigerian must be proactive rather than reactive by considering how these technologies would affect and influence our lifestyles and business operations and channel and thus fashion our rules of engagement for their adoption.”