Following Central Bank of Nigeria’s (CBN) disclosure that its much-anticipated digital currency will be launched in October this year, the founder of Blockchain Mobile Technologies, Mr Stanley Okwu, in this interview with ROYAL IBEH suggests what government must do for the initiative to be successful.
CBN recently disclosed that it will launch its digital currency by October this year, what is your view about that?
A central bank can actually float a cryptocurrency and establish exchanges for its conversion to the local currency. It will sell the cryptocurrency wholesale to financial institutions, e-commerce and supply chain industries and other related parties for competitiveness in the space and also allow a system that will have distributed records that will be verified by administrators.
However, with the emergence of the internet, many said, it does more harm than good and today, all of us cannot do without the internet. The application of internet today has given room for data consumption which has also contributed to revenue generation in the country.
So, for CBN to be looking at the technology involved, not just Cryptocurrency, is a welcome development for me. We have such a scenario happening in China, where Blockchain technology is used to pilot state own digital currency, in effort to grow its economy and increase revenue exponentially.
Therefore, in my view, CBN, launching its own sovereign-backed asset for anonymous transactions as well for its citizens and the financial sector to participate in the space using Blockchain technology, will give room for competition, transparency and trust which will eventually make its citizens to shun Ponzi scheme cryptocurrencies that lie outside the country ambit of anti-money laundering regulations. It will be a welcome development for the country if the CBN dream is achieved.
How can Nigerians benefit from CBN digital currency?
One reason for the initiative would be to make it easier to transfer remittances into the country. It will also lead to creation of job and evolves new ways for digital services in the country.
It will allow Nigeria’s importers to switch to crypto as a payment method instead of seeking for forex which sometimes might be difficult to access. In Nigeria, most of the things consumed are imported and that is why you see government working to localise this items to be produced and made available in the country and digital currency is not left out. So, Nigeria having its own digital currency will go a long way.
However, CBN must look for ways to secure and regulate it by getting team of experts and independent minds to work with them. We have lots of young minds in Nigeria that can come up with various ideas around digital currencies. Therefore, CBN has to engage all of them as well as other stakeholders in the space. Their Innovations should not be killed but should be well researched and implemented for the betterment of the country while making sure security is top priority for its citizen to operate in the digital space which is highly risky and volatile.
Since CBN is launching its own digital currency, would you advise that it should totally ban other cryptocurrencies like Bitcoin, Ethureum?
The technology behind cryptocurrencies, which is Blockchain, is here to stay and our ability to tap on the opportunities that come with it rather than looking at the negative aspect, will tell how we are going to survive future global financial crisis in view and truly become the giant of Africa. My advice to CBN is to address the major concerns about whether to ban or to regulate the cryptocurrencies industry while I call on well-meaning Nigerians and citizens to come up with suggestion on ways government can look at the industry for the general good.
Prohibiting the usage of Bitcoin won’t make people stop using the currency because of its anonymity. Others value the privacy of a currency that is not accounted in the same way that bank transactions are. Still, others find that Bitcoins are worth more than legal tender these days, with problems in the Euro zone and other countries. Some consumers feel that virtual currencies may be more efficient, and may offer newer, more flexible ways to pay for goods and services across borders.
We know of the story of websites like Silk Road, which allows people to buy drugs online and underground take Bitcoins. The criminal side of the usage of Bitcoin is what has garnered most headlines and that is why government is working at protecting its citizens.
Nigeria is full of brains and I think this is the time for collaboration between CBN and the people to embrace this technology for our own good, and to allow companies to participate in it just like PayPal, Micro Strategy, and Tesla that have announced their support for Bitcoin. In my view, banning Bitcoin is difficult to do and since Bitcoin is not issued by a government, it can still be created. So, rather than talk about ban, another alternative would be to seek for regulatory help.
What is your advice to CBN as it set to roll out its own digital currency?
My advice is for CBN to seek local and foreign experts to help them build a better digital currency platform.
Digital currency like Cryptocurrency is not built in few months. It takes a well- organised road map. Therefore, within this timing, CBN should seek for experts both local and abroad to assist them in order to avoid running into trouble. I believe, the CBN will get it right if they seek for good hands and experts to work with.