Nigeria Helpless as IMF Warns no Individual Country Can Stop Cryptocurrency on Their Own

Nigeria Helpless as IMF Warns no Individual Country Can Stop Cryptocurrency on Their Own

  • Nigeria may be fighting in vain to stop the spread and adoption of cryptocurrency in the country as IMF has sounded a note of warning such efforts may yield little results
  • An IMF chief, Gita Gpoinath said it will take combined efforts of all countries in the world to make it happen
  • The chief said the spread of cryptocurrency in developing countries like Nigeria is creating a new set of challenges for governments

Nigeria’s effort to curtail cryptocurrency adoption in the country may just be futile going by what the International Monetary Fund (IMF) said.

The organisation warned countries around the world that trying to control crypto will yield little effort as no individual government can achieve that on their own.

Gita Gopinath, IMF Chief Economist
Gita Gopinath Credit: Melissa Lyttle/Bloomberg
Source: Getty Images

The IMF said that trying to regulate crypto will achieve nothing less than a concerted global effort and a global agreement, which many believe is still a long way off.

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Gita Gpoinath, IMF’s senior economist said this during a lecture in New Delhi for a Delhi-based economics think-tank, the National Council of Applied Economic Research.

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What Gopinath is saying?

Gopinath stated that if governments ban crypto, they will have to no control over offshore exchanges that are not subject to their country’s legislation, which may lead to them being sidelined.

“There are challenges to banning it whether you can end up with truly banning crypto because many exchanges are offshore and they are not subject to regulations of a particular country.”

She said what is needed is a global effort, adding that no individual country can solve the problem on their own because it is easy to do transactions across border. She agreed that there is currently no policy on that.

Gopinath said cryto adoption is on the increase in developing countries where it is creating a new set of financial challenges economic policy makers, Nairametrics report said.

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The IMF official said:

“It seems to be more attractive to adopt crypto assets and cryptocurrencies in emerging developing economies than in advanced economies. If you look at take up around the world we are certainly seeing that there’s a rapid amount of adoption that’s happening in emerging and developing economies.”

According to her, the quick adoption of crypto is posing problems because emerging and developing economies have exchange rate controls and capital control capital flow measured and that crypto can circumvent the system.

Gopinath said that regulation is absolutely important for this sector and added that if people are using it as an investment class then the same kinds of regulations that you have on security traders and security dealer brokers should also apply to crypto-assets.

Earlier, reported that A Federal High Court in Abuja has rejected an interim decision directing the Central Bank of Nigeria (CBN) to freeze the accounts of two entities tied to cryptocurrency trading in two banks.

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Rise Vest Technologies Ltd, one of the firms affected, had dragged CBN to court seeking a reversal of the ban on its account.

CBN in August accused Riseinvest, Chaka, Bamboo and Trove that of illegal foreign exchange transactions which led to the naira's devaluation against the US dollar.


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