Giving the global growth of emerging technologies, some people have argued that cryptocurrency would be the future currency worldwide. What is your take on this?
The argument of Cryptocurrency becoming the future currency of the world, is not in any way stating that Cryptocurrency will replace the fiat currencies of the world. But Cryptocurrency has ushered in a new form in which money can exist and be transacted; which is better, faster, cheaper, and cost-effective to produce even for the government.
That is the whole idea of the CBDC – Central Bank Digital Currency, that is being developed worldwide. Cryptocurrency is simply Digital Money, and not some legal tender coming to do away with the existing ones issued by central banks.
They are very correct in their argument about cryptocurrency becoming the future currency of the world, especially when you look at the increased interest in it through the lens of institutional investors. Some of the top organizations in the world, reputed for their expertise, professionalism, and track record of growth and success in their respective industries, are having increased interest and even going further to invest in Cryptocurrency. It goes to show you that something has changed, and the world is moving in a new direction, and as an intelligent person or organization, the smart thing to do should be to look into this new phenomenon to understand it and its usefulness.
When innovations arise, it is important to ask smart questions like “Is this a solution?”, “Is it building the economy?”, “Is it a tool for economic empowerment and employment?” among others?
It is an innovation in money and finance, which has brought vast useful solutions to finance, money, and currency affairs.
Recently, the Central Bank of Nigeria (CBN), shocked many Nigerians by ordering the closure of all cryptocurrency accounts with banks. How is SIBAN tackling this?
Well, this came as a shock to us, especially in a period when we were beginning to make tremendous progress in the industry. When you look at the pronouncement by the CBN from the perspective of the recent successes in the industry, it is confusing to players and stakeholders in the fintech industry with many asking “Why is the CBN’s directive inconsistent with existing policy concerning digital assets in the country?” The reason for this is because, in September last year, SEC classified cryptocurrencies as crypto-assetsthat would be treated as commodities or securities in Nigeria, and is looking to regulate them. And this was welcomed by the industry players and stakeholders at large.
Also in November last year 2020, NITDA invited us as well as other key stakeholders, including the CBN and SEC to a workshop in Abuja to look into how we can help design a National Blockchain Adoption Strategy in Nigeria. As communicated by the NITDA Director-General, the Federal Government wants to generate $10Billion from the adoption of blockchain technology through its application in Key industries and sectors of the Nigerian economy.
Also in January this year, as industry players and stakeholders, we came together to form an Anti-Crypto Scam Task Force and Committee with the involvement of the SEC. This is what gave birth to what we have today asBlockchain Industry Coordinating Committee of Nigeria (BICCoN), a joint committee comprising of SIBAN, the Blockchain Nigeria User Group (BNUG), and the Cryptography Development Initiative of Nigeria (CDIN).
So with all these happenings and moves in the industry, it was worrisome and of concern to see the directive to the banks.
SIBAN is a Blockchain Association, not a Cryptocurrency Association. But Cryptocurrency is a part of Blockchain Technology. It is famous because it is the financial aspect of Blockchain, and that has made it the most popular application of Blockchain Technology.
At SIBAN, we are engaging industry players, stakeholders, regulators, policymakers, the government, media, and the general public at large tosensitize, propose solutions, and educate properly because there seems to be a lot of misinformation and misunderstandingout there.
One vital thing we desire is to be able to sit with the relevant bodies, take a holistic look at this, and contribute to the drafting of a framework for regulation and policy. We are happy to have the industry regulated properly, and are willing to help in that. We also want policies that will support the innovation, growth, and development of the industry to be initiated.
So this is what we are doing currently, and we are hopeful for a very good favorable outcome for all the parties involved.
Why does cryptocurrency have such a bad reputation? And what is SIBAN doing about it in Nigeria?
I won’t go as far as saying that cryptocurrency has a bad reputation. Many don’t know about it, possibly. Cryptocurrencies are typically seen as threats by financial operators, the custodians of fiat money, who label non-fiat money as tools for the crime.
Obviously fiat money has been used for criminal uses in Nigeria, such as money laundering, terrorism and kidnapping, over cryptocurrency. While there are instances of cryptocurrencies been used for fraud, the rate is low, as compared to, for instance, the Dollar or Naira. Therefore, if cryptocurrencies and other digital assets have a low criminal footprint, the solution should be regulation, not prohibition.
Obviously, the fundamental reason for the embrace and adoption of digital assets like bitcoin/cryptocurrencies is the distrust of centralized financial systems around fiat money and its susceptibility to government manipulation, with attendant effects on hyper-inflation, especially in African countries.
Cryptocurrency has created a vast value chain, has brought about increased economic activities, has reduced unemployment, and put Nigeria on the global map with a good spotlight.
How has technology enhanced the growth of cryptocurrency and how sustainable could this be?
Blockchain Technology is Web 3.0, this means it’s the 3rd generation internet. And this internet of this era is the internet for transmitting value, unlike the first generation internet that was the internet for transmitting the information.
Cryptocurrency is one of the values being transmitted, and all this is enabled by Blockchain Technology which has given users access to a lot of the utilities which Cryptocurrency has to offer.
Now, Blockchain is the technology that has enhanced the growth of Cryptocurrency, and Blockchain Technology is also applicable to every other technology because of its industry-wide compatibility, and solution-centered nature.
Cryptocurrency can be used by any form of technology to offer service as we have seen since the introduction of Bitcoin, to date. A large record of increase in the number of tech companies who have built utilities and solutions powered by Cryptocurrency in the last 12yrs has given rise to the number of Cryptocurrencies and solutions, and most of these companies have remained to date and still counting.
So I would say that technology has enhanced the growth of Cryptocurrency, and this is very sustainable as seen from the record available.
How is blockchain technology driving the effective use of cryptocurrency globally?
Cryptocurrency is built on Blockchain Technology, without Blockchain Technology, there would be no Cryptocurrency as it was the foundational technology designed to power it. Cryptocurrency is just one of the many things that Blockchain Technology can be used for, and it presently happens to be the most popular application of the Blockchain.
Blockchain is a solution-based technology, and its open-access nature has made it possible to be improved on continuously for better efficiency.
I couldn’t have imagined any other technology that could have been used. And globally, Blockchain Technology because of its capabilities is a topic of high global interest, and you can’t separate it from Cryptocurrency. So with this level of global attention, awareness and education are being spread, and part of it is the effective use of Cryptocurrency.
What is your general view about cryptocurrency? Do you see its future growth in Nigeria and other African countries?
Oh yes! Cryptocurrency will experience tremendous growth in Nigeria and Africa in general, and this cannot be stopped but only harnessed, as it is already doing that. You should know that Nigeria is the 3rd country globally with the highest trade volume of Cryptocurrency and the #1 in Africa.
The volume traded in Nigeria alone in 2020 from available records is almost twice the volume traded in the whole of Europe excluding the UK. Two other African countries who made it to the list of global top 10 trade volume, being Kenya and South Africa, when put together, did not make up to 50% of Nigeria’s total trade volume. So this goes to tell you that there is a great future for Cryptocurrency in Nigeria and Africa in general.
My view about Cryptocurrency is that it is a novel innovation that should interest everyone, both individuals, industries, and government alike.
It is a solution-driven sector; one that when harnessed properly will lead to tremendous gains across board—from the development and growth of an industry to increased economic activity, foreign direct investment, employment, technological innovation, and export commodity in the technology market. And all this will lead to revenue generation for the government through taxation and of course issuance of operation licenses or registrations.