News

Central Bank of Nigeria Speaks About the Terrorism Fuelled by Cryptocurrency

The Central Bank of Nigeria, comments on why it does not favour the means of digital currency and justifies the ban on the cryptocurrency in the country. According to the Central Bank, the cryptocurrency fuels illicit financial flows and terrorism activities. 

Acting Director of Corporate Communications, Osita Nwanisobi, said in a statement that this ban will not affect the progress regarding the Fintechs as there are other ways that can help the platform to thrive. He added that it is due to the unregulated and unlicensed organizations that issue cryptocurrencies. The Central Bank’s mandate does not support the use of digital currency. 

Nwanisobi explained, “The use of cryptocurrencies in Nigeria is a direct contravention of existing law. It is also important to highlight a critical difference between a Central Bank issued Digital Currencies and cryptocurrencies. As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities. The question that one may need to ask therefore is, why any entity would disguise its transactions if they were legal.”

Due to this, cryptocurrency has become a source of carrying out many illicit activities like the purchase of weapons, tax evasion, terrorism financing, and money laundering. Many banks and financial institutions upholding good reputations have been shut off due to the damaging effects of the use of the cryptocurrency for illicit activities. 

Cryptocurrency is known to be a part of the purchase of illegal drugs on a website called “Silk Road” on the darknet. Other reports have also disclosed that cryptocurrencies have been utilized to fund the terror plots which has further ruined its image as a legal mode of exchange. Furthermore, recent incidents show that some cryptocurrencies are being used as a hidden asset more than a means of payment.