Top Nigerian Minister Suggests Government Should Reconsider Policies Against Cryptocurrencies

Prince Clem Agba, a Nigerian minister of state for budget and national planning has extended his support for the budding space of cryptocurrencies before the government of Nigeria. Earlier this year, Nigeria's central bank had banned Bitcoin transactions from being facilitated by commercial lenders. Agba believes, however, that imposing anti-crypto regulations in the country could lead to grim consequences in the future. The minister's support for cryptocurrencies comes amid Nigeria's economy struggling to overcome inflation caused due to slow, COVID-riddled economic activities.

“The uncertainty in regulating cryptocurrencies risks denying government and citizens the chance to maximise opportunities from the technology,” a Bloomberg report quoted Agba as saying.

The African Development Bank Group (ADBG), in a recent study had revealed that the Nigerian economy entered into recession in 2020 due to a fall in crude oil prices on account of falling global demand and containment measures against Coronavirus.

The inflation rate also rose to 12.8 percent in 2020 from 11.4 percent in 2019.

Amid this economic chaos, the Internet-backed youth of Nigeria and other African nations began experimenting with the crypto space.

The crypto market in Nigeria, Kenya, Tanzania, and South Africa together saw 1,200 percent growth, reaching a market valuation of $105.6 billion (roughly Rs. 775 crores) in one year, a report by Chainalysis claimed in September.

Even after the Nigerian central bank ruled against legalising crypto-trading, the country did introduce its blockchain-based “central bank digital currency” (CBDC) called eNaira. Directly controlled by the Central Bank of Nigeria, the eNaira is subject to the daily transaction limits and other stratifications.

Owing to the decentralised and untraceable nature of cryptocurrencies, as well as the market volatility, several nations including India and Russia among other are refraining from legalising them.