IMF Supports CBN Crypto Ban, Cautions Against the Use of Digital Currencies

The International Monetary Fund (IMF) has taken a similar stance on cryptocurrency as the Central Bank of Nigeria (CBN) and has also cautioned against the use of digital currencies.

The global financial body explained that cryptocurrencies remain a concern not just to the Central Bank of Nigeria (CBN) but to other regulators across the world.

This development comes at a time when the world’s most popular cryptocurrency, Bitcoin is enjoying a tremendous boom and receiving worldwide adoption.

Bitcoin price has been on a major rally since mid-December rising from $20,000 to over $50,000. As of the time of drafting this report, Bitcoin traded at $52,030 with a daily trading volume of $81.5 Billion.

According to recent reports, there are now more than 94,000 Bitcoin addresses holding at least $1 million worth of $BTC.

IMF Backs CBN Crypto ban

Recall that earlier this month, the CBN directed banks and other financial institutions to close accounts dealing in cryptocurrency or facilitating payment for cryptocurrency exchanges with immediate effect.

The directive caused a backlash that made the CBN give its reasons for banning digital currencies. One of the major reasons it gave was that it was being used for criminal activities.

The IMF Resident Representative for Nigeria, Mr Ari Aisen, commenting on the apex bank’s action, expressed that the IMF has similar concerns.

He explained that the issue with cryptocurrencies is that perhaps some care should be taken about their activities and the use of cryptocurrencies.

Aisen revealed that some cryptos are involved in carrying out illegal activities; some may be related to money laundering, even drugs and other initiatives. Therefore, it is natural that the authorities would be extremely concerned about how best to supervise and improve the use of cryptocurrencies.

However, not everyone agrees with the IMF as the CEO of Dan Holding, Danny Oyekan told Technext that the notion that cryptos are being used for illicit purposes like money laundry is not a problem limited to cryptos alone.

He added that even fiat currencies like the Naira are being used for nefarious purposes more than digital currencies.

Crypto regulation is still a dilemma

The IMF representative noted that it’s not only the CBN that has concerns about cryptocurrencies. He explained that how best to regulate the digital currency remains a dilemma.

“Actually, central banks, not only in Nigeria have this concern about what kind of activities that cryptocurrencies might be supporting and how best to monitor those activities.

“We know that the Central Bank of Nigeria is concerned about it and trying to decide the best policy around this for the benefit of the payment system and the sustainability of the financial system,” he added.

While this might be true, it is also a fact that some other countries have started making plans and rolling out regulations without first resorting to a ban. The South Africa government recently amended it’s financial law and is already making plans to regulate cryptocurrency.

Similarly, the financial regulator of the United Arab Emirates (UAE) has brought out regulation and set out guidelines on how crypto assets are going to be regulated.