Cryptocurrency operators are seeking temporary suspension of restriction on their trade.
They (traders) have appealed to in the Central Bank of Nigeria (CBN) to partially suspend the ban for six months.
In a report titled: “Much ado about cryptocurrency – A path to regulated cryptocurrency environment”, the operators requested that during the window of suspension, exchanges will continue to be restricted from receiving any further deposits from customers.
The report was signed by 15 representatives of the Nigerian Tech Industry.
However, exchanges would be allowed to make payouts and liquidate their accounts as the CBN deliberates on the next line of action.
Last month, the CBN barred Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs) and Other Financial Institutions (OFIs) from dealing with cryptocurrencies and facilitating payments for cryptocurrency providers in Nigeria.
The regulator requested that these regulated institutions identify accounts conducting cryptocurrency transactions and immediately close them.
The operators said the total monthly bitcoin transactions (total trading volume) in Nigeria were valued at N80 billion at the close of last year.
“This is more than the total monthly turnover on the Nigerian Stock Exchange (NSE) in the second quarter of 2020. Many Nigerians use these digital currencies to conduct transactions in and out of the country,” they said.
The operators also requested that the CBN and other regulatory bodies can regulate cryptocurrency exchanges with existing laws and licences.
“The apex bank can add legal certifications for exchanges—for example, registration under the Special Control Unit on Money Laundering (SCUML),” the operators said.
According to them, cryptocurrencies should be classified as a digital commodity with appropriate laws for regulation, saying that the government can also benefit by adding these crypto-assets to Nigeria’s Capital Gains Tax (GGT), earning significant revenues.
The operators also called for the establishment of the framework for an International Finance Centre in a Special Economic Zone.
“The Financial Centre will be an off-shore area that can spur foreign direct investment and increase dollar supply. It will also be a gateway for Nigeria and Nigerians to participate in the global economy through modern instruments, including but not limited to the regulated use of cryptocurrency and the block chain,” they said.
The operators also asked the CBN to closely work with cryptocurrency providers to formalise their Know Your Customer (KYC), combating the financing of terrorism (CFT), and Anti- Money Laundering (AML) processes. This can include the use of Bank Verification Numbers (BVN) and National Identity Numbers (NIN).
”The CBN can mandate cryptocurrency providers to keep records of transactions for regulators like the CBN, Nigerian Financial Intelligence Unit (NFIU) or the Economic and Financial Crimes Commission (EFCC). The CBN can have access to domestic transactions and information on foreign inflows,” they added.
The technology ecosystem intends to be fully compliant with the regulatory directives of the CBN. In furtherance of its compliance, representatives of the ecosystem wish to directly engage with the CBN on the concerns of operators, local ecosystem stakeholders, and foreign investors regarding its regulatory stance on cryptocurrency transactions.
They said: “While the current circumstances are unpleasant, we believe we could turn this into an opportunity to make Nigeria a global leader in financial services. The proposed model will protect our financial system and leverage cryptocurrency and block chain technology to leapfrog legacy financial systems that have held us back. We believe and are prepared to work assiduously to make a world-class Nigerian International Finance Centre a befitting legacy for the current leadership of your good office.”