Nigeria’s Deposit Insurance Corporation Head Concerned About Crypto’s Evolution

Kevin O'Brien

The leader of the Nigerian Deposit Insurance Corporation (NDIC) expressed his concerns about the evolution of cryptocurrency from a regulator’s standpoint at a recent forum in Lagos.

According to The Sun, a Nigerian news outlet, NDIC Managing Director/Chief Executive Umaru Ibrahim said

“The partial dis-intermediation of the banking system arising from proliferation of digital currencies such as bitcoin, as well as the activities of FinTechs are all of critical concern to the corporation.”

Ibrahim indicated the influence of cryptocurrency presented a new set of challenges to financial regulators that are vastly different than what have been seen in the past.

Cryptocurrencies Are A Particular Focus Of The NDIC

Ibrahim remarked how the ‘entire fabric’ of worldwide financial stability is facing multiple crises, but emphasized how the NDIC is particularly focused on and concerned about cryptocurrencies.

Chinenye Anuforo of The Sun wrote how the NDIC’s concern about crypto’s evolution comes from its “capability to jeopardise the efficacy of safety-net arrangements and prudential roles of the traditional banking system.”

Other entities inside of the country have also taken a wary stance against cryptocurrency.

In late November, one commenter on the Nairaland Forum posted a message from Union Bank that said it received guidance from the Central Bank of Nigeria “that cryptocurrency is not a legal tender in Nigeria and has cautioned against transacting in them.”

As a result, the Bank said it would “monitor accounts being used for cryptocurrency transactions and may impose restrictions including closure of such accounts” in order to “guarantee the security of our customer’s funds.”

A Coming Cryptocurrency Revolution In Nigeria?

One of the presidential candidates standing for election in February 2019 is Atiku Abubakar, who has included a “comprehensive blockchain and digital currency policy” in his platform.   

Abubakar is the candidate of the People’s Democratic Party, the biggest opposition party in the nation. He promised to focus government efforts on blockchain and cryptocurrency regulations that would promote economic growth.

His pro-crypto and blockchain stances are apart of a larger mission in his mind to “ensure that Nigeria’s economy is responsive to the challenges of the 21st century knowledge economy by keeping with the amazingly dynamic technological pace.”

Naija247News wrote how Abubakar’s vision of posturing himself as a 21st-century leader is an effort to differentiate himself from incumbent Muhammadu Buhari, who “has been criticized for his handling of the economy.”