Nigeria may soon introduce digital currency regulations to keep a check on money laundering and also to avoid any international penalties. The call for introduction of bitcoin regulations has come from the deputy governor of financial stability at the Central Bank of Nigeria.
Dr. Okwu Nnanna, the deputy director of Nigeria’s Central Bank was speaking at an event organized by the Association of Certified Anti Money Laundering Specialists when he called for digital currency regulations. Bitcoin usage has been catching up across the globe. It is being widely used for cross border remittance, fund transfer, trading and to buy goods and services in place of fiat currency. The speed of transaction combined with low transaction fee and decentralized nature of the currency are main reasons for its adoption.
Even though the number of bitcoin users are growing exponentially across the globe, majority of the nations do not have specific digital currency regulations in place. It is mainly due to various reasons. Digital currency and the technology behind it are still new. Blockchain technology which powers bitcoin network has a wide range of applications and many governments have decided to wait and watch how the digital currency grows instead of hindering its development by imposing regulations.
However, bitcoin transactions are pseudonymous which makes it hard to identify the person(s) involved in transactions. Even though the transaction data is publicly available on blockchain and can be queried using public wallet key, it takes a lot of time and effort to find the identity of the person to whom the wallet belongs to. This makes bitcoin a favored currency for money laundering.
It is still unknown when Nigeria will initiate the process of drafting regulations. However it is essential for the country to go soft on bitcoin at least for the sake of its citizens who are gradually adopting to mobile money.
Image: Haggai Institute