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Nigerians warned of cryptocurrency risks

November 29, 2017 • Finance, Online & Social, Top Stories, West Africa

Nigerians warned of cryptocurrency risks

Nigerians warned of cryptocurrency risks (Siliconangle.com)

Nigerian Deposit Insurance Corporation (NDIC), the country’s financial sector insurance regulator, on Monday 27 November 2017, again warned Nigerians against the risk of trading with digital currencies not issued by the Central Bank of Nigeria (CBN). The warning comes after Bitcoin hit an all time high last week as it rocketed above the $8, 000 mark and all signs pointing to a continued rise.

The CBN, also said that it has not endorsed the trading in virtual currencies, including bitcoin, ripples, litecoin, adding that “any bank or institution that transacts in such businesses does so at its own risk.”

Mohammed Umar, director Research, Policy and International Relations, NDIC, said “The financial regulatory authorities are not playing catch up on the digital currency race in Nigeria. There is no country in the world that allows its citizens to use digital currencies as money not issued by the Central Bank,”.

“No Central Bank will accept digital currency as a substitute for its national currency or part of its monetary system, when it is not able to control it. Nigerians must understand that adequate notice has been issued by all financial sector regulatory authorities, namely Central Bank of Nigeria, CBN, and Nigerian Deposit Insurance Corporation, NDIC, to warn Nigerians who want to trade in bitcoins as gamblers. They can only do so at their own risk. The CBN cannot say anyone cannot trade with it and NDIC will not insure any trading in any currency not issued by the CBN,” Umar stated.

Umar revealed that an inter-agency committee, involving the NDIC, Ministry of Justice, Economic and Financial Crimes Commission (EFCC), Nigeria Police, Department of State Services, DSS and other relevant agencies, had been established to, “sanitise the system.”

He said the committee, with its secretariat at the CBN, would closely monitor the activities of digital money operators to ensure Nigerians were not exposed to unnecessary risks.

“If you can buy a bitcoin, nobody will stop you. It is at your own risk. A bitcoin is not covered by the CBN rules, and NDIC will not insure it. We have consistently warned Nigerians that anyone who trades in bitcoin does so at his own risk,” concluded Umar.

Edited by Dean Workman
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