9 November 2018

Nigeria: Lack of Regulation in Blockchain Space Forces Investment Out of Nigeria

The inability of Central Bank of Nigeria (CBN) to provide regulatory framework that will guide financial services using blockchain technology is taking toll on the economy as investments meant for the country are been diverted to some African countries and Malta, Nigeria CommunicationsWeek has learnt.

This was attested to by financial technology experts that spoke at Electronic Payment Practitioners Association of Nigeria, E-PPAN, 9th conference held in Lagos earlier this week.

Ade Atobatele, founder, Gboza Gboza Technology Ltd, said that Nigeria is losing money by not coming up with regulation of financial technology especially services delivered through blockchain technology.

"Investments in blockchain technology based financial services such as cryptocurrency are today going to Rwanda and Malta which has provided regulatory framework that guide operators of the technology. We have license with CBN, but our blockchain technology base service are been operated in Rwanda which has offered us the license. More so, huge investment is going into Malta in the area of cryptocurrency that runs on blocakchain technology, "he said.

He noted that financial technology moves faster than regulators and seeks collaboration among financial technology operators to address risks and effective service delivery.

Musa Jimoh, Deputy Director, Banking and Payments System Policy, Central Bank of Nigeria, while responding to the need for regulation of financial technology operations, said that CBN has realized that financial services cannot be provided by banks alone anymore and that regulation on financial technology will be released anytime from now.

"We are restructuring licensing regime to accommodate risks that fintech present in the system and how they can work with banks to mitigate those risks. Fintechs are coming up with products and technology that is unmatched with banks, this also need to be addressed, " he said.

Michael Kiberu, Chief Executive Officer, Vault Bridge, said Nigeria can take a cue from countries such as Uganda, Switzerland, Kenya, Japan, where adoption of blockchain technology has greatly impacted the landscape.

Kiberu said Switzerland took blockchain as an opportunity and not a threat, noting that the benefits accruable from adoption would be much."The government also stands to gain a lot from adopting the new frontiers in technology development like blockchain and Cryptocurreny. Even the few individuals who claimed to have some knowledge about blockchain end up tagging blockchain with Cryptocurrency as the only solution that blockchain can deliver. Blockchain is a disruptive and innovative technology built on trust, an answer to an immutable record, storage, transmission of any form of data or transaction," he said.

Nigeria

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