The Association of Bureaux De Change Operators of Nigeria (ABCON) on Tuesday charged the Central Bank of Nigeria (CBN) to introduce measures that would counter the use of cryptocurrencies for Diaspora remittances.
The group argued that the rise in the adoption of cryptocurrency exchanges by the public could be responsible for the wide drop in Diaspora inflows to the country.
In a statement made available to Ripples Nigeria after its Quarterly Economic Review for Q1 2021, the association noted that such measures by the CBN were necessary to redirect Diaspora remittance inflow away from cryptocurrency exchanges to official channels.
Although ABCON commended the CBN for the N5 per dollar rebate scheme introduced to encourage Nigerians in Diaspora to use official channels for remittance transfer, it, however, noted that the apex bank needs to address other issues driving the patronage of cryptocurrency exchanges for remittance transfer.
The group maintained that the insecurity in the country was giving cryptocurrency greater prominence as investors and citizens are finding it a safe haven for their wealth in case of any eventuality.
“In most Emerging Markets Bitcoin transfers surged last year, as the pandemic exposed the cheaper and more efficient digital remittance services.
“Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.
“Cryptocurrency transactions are faster than the conventional transfers, which require passing through banks reliant SWIFT, the sluggish, half-century-old interbank messaging system that handles cross-border payments.
“These exchanges override the political complications of official channels. The global reach of cryptocurrencies avoids the inflation risk inherent to official currencies, especially in politically unstable countries reliant on fickle foreign investors.
“Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the IMTCs and the exchange rate.
“Strategies that satisfy the most sensitive of these advantages of Cryptocurrency exchanges must be introduced to redirect flows to the official channel,” the group said.
By Victor Uzoho
Join the conversation
Support Ripples Nigeria, hold up solutions journalism
Balanced, fearless journalism driven by data comes at huge financial costs.
As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.
If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.
Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.
INVESTIGATION… LIVES ON THE LINE (IV): Surviving in a dangerous media environment
This investigation is on the unresolved killing of three Nigerian journalists while on assignments between 2019 and 2020. For six...
INVESTIGATION… LIVES ON THE LINE (III): Precious Owolabi was killed covering a protest
This investigation is on the unresolved killing of three Nigerian journalists while on assignments between 2019-2020. For six months, Nigerian...
INVESTIGATION… LIVES ON THE LINE (II): Alex Ogbu was telling a story but became the story
This four-part series investigation is on the unresolved killing of three Nigerian journalists while on assignments between 2019 and 2020....
SPECIAL REPORT… TELECOMS BLACKOUT: Nigeria’s latest tactic against banditry grounds businesses, forcing residents beyond borders
The fight against notorious bandits raining terror and kidnapping students in Northwest Nigeria took a new dimension in September as...
INVESTIGATION: How MDAs violate procurement rules in contract awards
An investigation has uncovered how Nigerian government Ministries, Departments and Agencies (MDAs) have continuously violated procurement rules in awarding contracts,...