By Emma Ujah, Abuja Bureau Chief
There are indications that Nigeria’s financial sector regulators are wary of crypto currencies trade and may not provide security for investors in the system.
Dr. Ibrahim Alley of the Research Department of the Nigeria Deposit Insurance Corporation (NDIC) who gave this hint in Abuja, at the forum of the Finance Correspondents Association of Nigeria (FICAN), said that some jurisdictions had recognised crypto currencies because of the level of development of their economies but that Nigerian regulators did not want Nigerians to invest in schemes that they did not understand and not under the purvey of Nigerian regulatory authorities.
He stated: “Just like regular financial institutions are regulated to protect the public from risks, so are the emerging Fintech operators. The approach and severity of regulatory stance correspond to the level of risks posed by Fintech operations to the public and financial stability.
“If Fintech operations would pose risks manageable within the regulatory and supervisory framework, it is allowed and embedded within the framework for effective risk management and financial system stability, else, the monetary and banking supervision authorities either disclaim it (in case of Nigeria and many other Sub-Sahara African countries like Ghana, Kenya) or ban it absolutely (Algeria, UAE) or implicitly (China, Lesotho).”
Risks of Fintech, he said included: lack of consumer understanding; Mis-selling of products and services; financial exclusion; data privacy, security and protection; and reduced competition.