- The Central Bank of Nigeria has been told to use its policy to stop bitcoin, cryptocurrency from disrupting remittance market
- Association of Bureau De Change Operators of Nigeria made the request, stating that migrants now prefer cryptocurrency
- The money transfer system of the financial institutions was blamed for the surge in cryptocurrency for remittance
The Central Bank of Nigeria (CBN) has been urged to make policies that will prevent cryptocurrency from reducing diaspora remittances through the official channel such as banks, investors and exporters window, as well as the Bureau De Change.
Association of Bureau De Change Operators of Nigeria (ABCON) had made the suggestion to the apex bank after their Quarterly Economic Review for the first quarter of 2021.
The group said people are now depending on the digital coin to send money back home due to less charges, ease of obtaining the crypto. ABCON said insecurity had also compelled many to turn to the digital asset.
It was stated that cryptocurrency is behind the dwindling remittance and the financial regulator should implement measures that will redirect money flow into the country.
According to the association, the disruption of the cryptocurrency in remittance market need to be prevented by the CBN as investors and citizens are finding bitcoin and digital assets a safe haven for their wealth in case of any eventuality.
A statement from ABCON said the exorbitant costs of traditional money transfer companies like Western Union has made bitcoin a choice for migrants sending money back home.
Bureau De Change cited the cross-border transfer system of the traditional banks as one of the challenges pushing support for the crypto, describing it as a sluggish, half-century-old interbank messaging system.
Part of the reasons listed included the use of cryptocurrency to hedge wealth and avoid global inflation tied to fiat currency like dollar and naira. The CBN had tried to use the N5 for every one dollar transferred, but cryptocurrency continues to gain momentum.
"Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the IMTCs and the exchange rate.
"Strategies that satisfy the most sensitive of these advantages of Cryptocurrency exchanges must be introduced to redirect flows to the official channel.” ABCON said.
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