Nigerian Government Introduces a Crypto Adoption Roadmap 0 418

Nigerian Government Introduces a Crypto Adoption Roadmap

A roadmap was recently published by the Nigerian government that outlines a plan for the adoption and promotion of blockchain. Their aim is to reduce corruption, help the unbanked in banking, and to ensure the growth of the country’s economy. There is increasing crypto adoption all over the world. Only a few days ago, PayPal made an announcement that it is planning on adding support for crypto on their platform in the foreseeable future. Now, a whole government i.e. the Nigerian government, to be more accurate, has revealed a roadmap that’s dedicated to the adoption of blockchain and crypto in the country. 

This Nigerian roadmap details a plan intended to digitize the country’s economy and it believes that blockchain technology has the potential to assist it in creating a bright financial future. ‘National Blockchain Adoption Strategy’ is the name given to the roadmap and it basically sheds some light on the importance of blockchain, how it has eliminated the need for trust and how it has been adopted in the country so far. Moreover, it also provides details about the government’s plans on how blockchain tech can be used even further and even how they can integrate it with a number of other modern technologies. 

The Federal Ministry of Communications and Digital Economy in Nigeria created the framework of the roadmap and is publicly available currently. The current government in the country plans on digitizing the Nigerian economy and eventually reduce the reliance they have on resources, such as gas and oil. For the most part, the roadmap is focused on introducing some proper rules and regulations related to emerging technologies, but also areas like capacity building, skills, international competitiveness, investment, innovation, and more. Where the regulations are concerned, the Ministry highlighted that there is no legal framework in place when it comes to blockchain. 

Furthermore, the central bank in the country also seems quite distrustful of digital assets up till now. On several occasions, the central bank had issued warnings to Nigerian citizens against trading of cryptocurrencies. This was also addressed in the government draft and it also highlighted that there was a vital need for solving this problem as soon as possible. If there is no proper regulatory framework in place, it wouldn’t be possible for the country to adopt blockchain technology and then use it for growing the Nigerian economy as planned. According to the draft, having a legal framework has become essential because it would provide guidance regarding the adoption of blockchain technology in the private and public sectors.

There is no doubt that a regulatory framework is crucial, but it is not the only initiative that has been mentioned in the draft. In fact, there are a total of six tasks that have been mentioned. These include establishing the Nigerian Blockchain Consortium, strengthening the regulatory framework, providing the national digital identity, developing blockchain business incentive programs, establishing a nationwide blockchain sandbox, and promoting blockchain literacy. If all of these are accomplished, it could provide great benefits to the country.

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IMF Says Russia and Iran May Use Crypto Mining for Monetizing Energy 0 41

The April 2022Global Financial Stability Report of the IMF has highlighted the consequences of the ongoing Russian invasion of Ukraine. The document said that the role of the US dollar was bound to be affected because of the conflict, as it would lead to the introduction of central bank digital currencies (CBDCs) and the global financial system’s resiliency would also be put to a test. The climate transition goals could also be put at risk because of the priorities associated with energy security. Another issue that would have to be dealt with in the coming years by lawmakers is the ‘cryptoization’ which is likely to occur because emerging markets are experiencing a widespread use of crypto.

IMF cited an increase in crypto trading volumes seen after the introduction of sanctions on Russia to back their statement. This included the financial penalties that had been imposed by Western nations on Russia because of its military invasion. The report said that such cross-border transactions were increasing in the long-term, which means that there would be challenges when it comes to imposing sanctions and managing capital flow. The IMF noted that crypto transactions have increased in both Russia and Ukraine because of the capital restrictions that have been imposed.

However, it is important to note that there has been a fall in liquidity in centralized exchanges where the hryvnia and ruble trading pairs are concerned. Therefore, using crypto exchanges for making large transfers has become rather impractical due to reduced liquidity. But, the IMF admitted that users do have the option of evading some measures via the crypto ecosystem because the identity verification requirements are quite lax in this industry. Hence, the international organization said that blocking new deposits of ruble and freezing crypto assets meant that users could have shifted to non-complying or less transparent crypto platforms and service providers.

Experts at IMF believe that both Russia and Iran could circumvent their respective sanctions via crypto mining. The nations could use their energy resources for generating revenue via crypto mining outside of the traditional financial system. Currently, the countries have a limited share of crypto mining activities, but there is a possibility that it could be increased, considering the size of the mining industry. The IMF quoted estimates showing that almost 11% of the mining revenues of bitcoin could have gone to Russia, which was around $1.4 billion per month, while Iran’s share had been 3%.

Bank of England Says Crypto Assets have Financial Stability Risks 0 80

On Thursday, the Financial Policy Committee of the Bank of England disclosed that they are working on developing a regulatory framework for digital assets. The central bank also made a reference to the sanctions that have been imposed because of the war between Russia and Ukraine in the statements. Bureaucrats and financial regulatory authorities all over the world have become increasingly concerned in recent times that Russia could take advantage of crypto assets to bypass the economic sanctions that have been imposed. The press statement of the BOE said that it was unlikely for crypto assets to provide Russia with a feasible way to get around sanctions at a large scale for now, but there was a possibility they could do so.

Therefore, it is a must to ensure that there are effective public policy frameworksthat can accompany innovation in crypto assets for maintaining the integrity and trust in the financial system. The crypto economy has been highly criticized by some members of the Bank of England for quite a while. Last year in mid-November, Andrew Bailey, the Governor of the Bank of England, had expressed his concerns about the adoption of bitcoin as legal tender in El Salvador. Sir Jon Cunliffe, the deputy governor for financial stability for the central bank, said in the following month that prices of crypto assets could drop to zero.

On Thursday, the report of the FPC talked about financial stability. The committee of the central bank noted that the FPC is assessing the risks to the financial system’s stability and it has concluded that these are currently limited. This is because their size remains limited for now and they are not that connected with the wider financial system. However, the FPC said that if they continue to grow at the same pace, and if they become interconnected with the overall financial system, then these crypto assets could pose a risk to the stability of the financial system.

Since the conflict between Russia and Ukraine began, politicians and lawmakers all over the globe have been discussing, developing, or even proposing laws aimed at regulating and researching digital currencies. The FPC’s statements on Thursday show that the BOE wants to classify crypto assets in the same category as it does traditional financial assets. Not only does the FPC plan on developing a regulatory framework that would govern digital assets, it has also mentioned stablecoins.

The FPC said that a major stablecoin that does not have a reliable deposit guarantee could turn out to be a risk to the UK’s financial system. According to the committee, if they introduce a systemic stablecoin, which is backed through a deposit mad with a commercial bank, it would result in significant risks to the stability of the financial system. All of this talk about crypto has been brought forward because of the Russian-Ukraine conflict and the possibility of the former using cryptocurrencies to evade the tough economic sanctions that have been imposed by Western nations due to its actions.

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