Henry Paulson, former United States Secretary of Treasury and former chairman Goldman Sacks once commented saying, Regulation needs to catch up to Innovation. This statement rings true for the relationship between regulators and crypto related companies.
In recent years, cryptocurrency startups and exchanges have been on the stick end of regulators with heavy sanctions and penalties levied against them.
Earlier in the year, the Central Bank of Nigeria (CBN) placed a restriction on all financial institutions to stop facilitating crypto-related transactions in a bid to control its rapid adoption. This led to a short term dip. Today, however, crypto adoption in Nigeria continues to rise as Nigeria is the second-largest country with users of cryptocurrency.
In a panel discussion which involved Uzoma Dozie, CEO of Sparkle; Buchi Okoro, CEO of Quidax; Dickson Nsofor, CEO of Korapay; Austin Okere, CEO of CWG; Nkemdili Uwaje, CEO of Future Software; and Chimezie Chuta, Founder Blockchain Nigeria User Group, regulation was in focus as they answered questions around untying the regulatory knots in the space.
A key idea that was mentioned by all speakers was the pace at which cryptocurrency is changing the financial system. Uzoma Dozie spoke about the difficulties to scale crypto because it is currently one of the fasted payment systems in the world. This is why regulators are wary about it. About the eNaira, he said the Nigerian CBDC is not going to compete with card payments. It will only be one of the many available payment systems.
Buchi Okoro, CEO of Quidax elaborated that the central bank’s development of eNaira is a step towards meeting stakeholders halfway and will encourage digital liquidity. He explained that in the same way that WhatsApp can’t replace hugs and physical interactions, so also cryptos can’t replace fiat cash. Both currencies can only collaborate to bring better lives to the people.
Austin Okere, on his part, noted that there’s smart regulation and dumb regulation; an important statement that resounded with the audience. According to him, dumb regulation is when there’s not much knowledge and regulation is done out of fear. Mr Okoro explained that regulators need to gain more knowledge into the space to enable them to make critical regulations on cryptocurrency.
According to Dickson Nsofor, people look at cryptos as stock value ability to invest in and all that. But the real value of crypto is to exchange value across borders without any centralized body. He explained that while cryptocurrency is the future, it will not replace the traditional means of value exchange. However, it will keep disrupting and changing that space.
“Facebook changed its name to Meta and it is a trillion-dollar company. If they did that, they are not stupid. Even if they are stupid, I want to join them in that stupidity.”
In the end, panellists were united in saying crypto is already here to stay. And even though it isn’t going to replace fiat, it would cause loads of disruption. Therefore, the government should do their jobs of regulation in good time.
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