Blockchain Technology is Not Cryptocurrency and Cryptocurrency is Not Unlawful in Nigeria

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A press launch by Stakeholders in Blockchain Technology Association of Nigeria (SiBAN)

Based in 2018 on the correct to peaceable meeting and affiliation beneath part 40 of the Nigerian Structure, Stakeholders in Blockchain Know-how Affiliation of Nigeria (SiBAN) is an affiliation of blockchain-industry gamers that undertake self-regulation in the direction of selling a much bigger, friendlier, and safer blockchain {industry} in Nigeria.

We work with our registered members to advertise a good and secure digital asset marketplace for innovators by way of self-regulation, schooling, and collaboration with related non-public and public our bodies. SiBAN is a member of:

The Blockchain Trade Coordinating Committee of Nigeria (BICCON)
Blockchain Associations Discussion board (BAF) by the British Blockchain Affiliation (BBA)
Centre for Proof-Based mostly Blockchain (CEEB)
Fintech Alliance Coordinating Staff (FACT)
World Digital Asset & Cryptocurrency Affiliation (World DCA)
A key stakeholder acknowledged within the Nationwide Blockchain Adoption Technique by the Federal Ministry of Communications & the Digital Financial system and the Nationwide Data Know-how Growth Company (NITDA)

Ledger Nano X - The secure hardware wallet

Blockchain Know-how is Not Cryptocurrency

1. Blockchain expertise shouldn’t be cryptocurrency. Blockchain permits something of worth, together with currencies, identities, info, mental property, securities, and votes, to be saved, managed, or transferred effectively, securely, and transparently, with out a government or third social gathering.

Blockchain is utilized in agriculture, aviation, banking & finance, leisure, well being, worldwide commerce, manufacturing, oil & fuel, actual estates, sports activities, telecommunications, transportation, and plenty of different industries and sectors. 

2. Identical to Synthetic Intelligence (AI), Large Information, Web of Issues (IoT), blockchain is an rising expertise, due to this fact no legislation or regulation is required to make blockchain acceptable in Nigeria. In any case, the Federal Ministry of Communications and the Digital Financial system, by way of the Nationwide Data Know-how Growth Company (NITDA), has printed a Nationwide Blockchain Adoption Technique that acknowledges blockchain expertise within the nation. One of many many purposes of blockchain is cryptocurrency.

Cryptocurrency is created, saved, and transferred with using blockchain expertise. In line with the Monetary Motion Activity Power (FATF), digital foreign money is a digital illustration of worth that may be digitally traded and features as (1) a medium of alternate; and/or (2) a unit of account; and/or (3) a retailer of worth, however [may] not have authorized tender standing.

Cryptocurrency shouldn’t be illegal in Nigeria.

3. Cryptocurrency or digital foreign money itself shouldn’t be illegal in Nigeria. Below Nigerian legislation at the moment, it’s neither a civil nor a prison offense to purchase, promote, or retailer cryptocurrency. Using cryptocurrency as a medium of alternate, funding asset, or retailer of worth is a legit act in Nigeria. Additionally, opposite to the widespread perception, cryptocurrencies that run on public blockchains akin to bitcoin, Ethereum, and Litecoin for instance, are traceable and clear, thus they help investigations by law-enforcement companies. Capability constructing is important right here.

4. The Central Financial institution of Nigeria (CBN) cryptocurrency directive of February 5, 2021 to deposit cash banks (DMBs), non-bank monetary establishments (NBFIs), and different monetary establishments (OFIs) in Nigeria is restricted to cryptocurrency transactions within the banking and monetary system solely.

Cryptocurrency or cryptocurrency transactions outdoors the banking and monetary system is not coated by the CBN cryptocurrency directive. Subsequently, so long as a cryptocurrency transaction shouldn’t be facilitated by a DMB, NBFI, or OFI, any particular person or entity is lawfully entitled to have interaction in it. 

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SEE ALSO: SEC Nigeria Flags Pinkoin and InksNation Blockchain Projects as Illegal, Days after SiBAN Nigeria Calls the Project a Scam

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5. The CBN cryptocurrency directive doesn’t ban cryptocurrency in Nigeria. Talking on behalf of the Governor of the CBN on the thirtieth seminar for Finance Correspondents and Enterprise Editors in Abuja FCT, March 2021, Adamu Lamtek, Deputy Governor of the CBN clarified that the CBN didn’t ban cryptocurrency exercise within the nation.

Within the phrases of Mr. Lamtek:

“[The] CBN didn’t place restrictions from [sic] use of cryptocurrencies, and we aren’t discouraging folks from buying and selling in them. What we’ve got finished was to ban transactions on cryptocurrencies within the banking sector.”

By the way in which, a Federal Excessive Courtroom (Abuja division) in Governor CBN v Rise Vest Applied sciences Ltd & Others [suit no. FHC/ABJ/CS/822/2021] has questioned the validity of the CBN cryptocurrency directive since an offense in Nigeria have to be outlined in a written legislation, not in a mere round.

Public companies and legislation enforcement companies ought to cease the demonization, discrimination, and stigmatization of blockchain and cryptocurrency in Nigeria. Capability constructing is beneficial.

6. We due to this fact humbly and respectfully ask all public companies, departments, parastatals, and ministries, together with the Company Affairs Fee (CAC) and the Nigeria Customs Service, in addition to legislation enforcement companies, together with the Nigeria Monetary Intelligence Unit (NFIU), the Nigeria Police, and the Financial and Monetary Crimes Fee (EFCC), to please pay attention to the place of legislation and truth above.

Every so often, situations of undue arrest and detention, bank-account blocking and closures, discrimination, extortion, harassment, intimidation, seizures, and queries, are skilled by individuals or entities concerned in any blockchain or cryptocurrency exercise in Nigeria, notably for the reason that CBN cryptocurrency directive of 2021.

Contemplating that the speed of legit cryptocurrency transactions globally is over 99% whereas the speed of cryptocurrency for illicit transactions is lower than 1% (each in 2020 and 2021, in response to Chainalysis Crypto Crime Report), the present demonization, discrimination, and stigmatization of cryptocurrency within the nation is unwarranted.

What the nation urgently wants is risk-based regulation for cryptocurrency actions. We suggest capability constructing.

Banks and different monetary establishments ought to admire the distinction between blockchain expertise and cryptocurrency of their relationships with present and potential prospects. We suggest capability constructing. 

7. All DMBs, NBFIs, OFIs within the nation should cease denying banking and monetary companies to people and entities solely as a result of these people or entities undertake, apply, develop, market, use, or promote blockchain expertise. The place the blockchain services or products in query doesn’t contain cryptocurrency, DMBs, NBFIs, and OFIs mustn’t deny banking and monetary companies to those people and entities by counting on the CBN cryptocurrency directive. 

For the document, blockchain and cryptocurrency are not the identical. If handled as the identical, the CBN’s very personal blockchain-powered eNaira and every other blockchain-powered services or products within the nation can be affected in Nigeria’s banking and monetary system as nicely. This, after all, shouldn’t be the intention of the CBN.

We suggest capability constructing in blockchain and cryptocurrency, notably AML-CFT for digital property, to banks and different monetary establishments. 

All stakeholders within the blockchain and crypto {industry} should adhere to the rule of legislation and regulators ought to take into account risk-based regulation.

8. As law-abiding residents in a democratic state ruled by a constitutional authorities the place the Structure ensures the elemental rights of each Nigerian, we count on each private and non-private sectors in Nigeria to stick to the rule of legislation always. At SiBAN, we’ll proceed to advertise anti-money laundering and combating the financing of terrorism (AML-CFT) compliance, and different finest practices amongst our registered members. We’re at all times able to collaborate with related companies on this regard. The place the rights of our members are violated, we’ll discover administrative and authorized choices to hunt redress.

9. Historical past exhibits us that each innovation is accompanied by alternatives in addition to dangers. Blockchain expertise and its cryptocurrency use case aren’t any exception. With world blockchain and cryptocurrency adoption growing each day, a risk-based regulation is the method we suggest to regulators.

The Basel Committee on Banking Supervision of the Financial institution for Worldwide Settlements (BIS), FATF, Worldwide Group of Securities Commissions (IOSCO), and plenty of different organizations additionally suggest a risk-based method.

10. Other than risk-based regulation, Nigeria wants advocacy packages, particular schooling, and fixed mass engagement and collaboration to equip the general public and the regulators with understanding of blockchain. The UK, the US, and different jurisdictions, together with Mauritius and South Africa, are adopting rules that assist reduce dangers whereas maximizing alternatives. As a pro-innovation and pro-regulation affiliation, SiBAN welcomes coverage & regulatory engagements in addition to collaboration on this regard.

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Contact SiBAN:

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RECOMMENDED READING: How SiBAN, a Self-Regulatory Blockchain Association, is Sanitizing the Blockchain and Crypto Space in Nigeria

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