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CBN law to affect Mastercard’s bitcoin, cryptocurrency adoption in Nigeria

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CBN law to affect Mastercard's bitcoin, cryptocurrency adoption in Nigeria

Nigeria’s local law will affect the adoption of bitcoin and other cryptocurrencies by Mastercard, as the international credit card company announced that it will include cryptocurrency assets into its network.

Mastercard said it will start enabling its users; shoppers and merchants, in the usage of cryptocurrency, as the digital currency has become a vital mode of payment.

According to a statement obtained from Mastercard, the growing rate of crypto cards had compelled the firm to review its currency options.

“Whatever your opinions on cryptocurrencies — from a dyed-in-wool fanatic to utter skeptic — the fact remains that these digital assets are becoming a more important part of the payments world.

“We are seeing this fact play out on the Mastercard network, with people using cards to buy crypto assets, especially during Bitcoin’s recent surge in value. We are also seeing users increasingly take advantage of crypto cards to access these assets and convert them to traditional currencies for spending.” Mastercard said on Wednesday.

The company, however, stated that only stablecoins among the cryptocurrencies will feature on its network. Mastercard hasn’t decided which cryptocurrency assets to accept, but Bitcoin, which is the most popular and used crypto asset, is expected to feature on the network.

Mastercard is one of the latest global brands to consider crypto assets as a viable currency for transactions, following Microstrategy and Tesla’s adoption of Bitcoin. Tesla had described Bitcoin as tangible asset which the automaker expects to start exchanging for vehicles.

Read also: Senate summons CBN governor, SEC chief over ban on cryptocurrency trading

“We are here to enable customers, merchants and businesses to move digital value — traditional or crypto — however they want. It should be your choice, it’s your money.” Mastercard said.

Mastercard said it is in talks with several major central banks that are planning to “launch new digital currencies, dubbed CBDCs, to offer their citizens a new way to pay.” The company said it created a test platform for these banks to use crypto assets in a simulated environment.

However, Mastercard stated that local laws and regulation will determine the use of the digital assets in its markets. This poses as a stumbling block for Nigerian-based users of Mastercard, due to the Central Bank of Nigeria’s decree, banning deposit money banks (DMBs) and other financial institutions from engaging in crypto assets.

Ripples Nigeria had reported that the financial regulator ordered banks and other financial institutions to shut accounts related to cryptocurrency and not allow for crypto transactions.

It is unsure if the CBN is part of the central banks working with Mastercard to produce regulator-backed cryptocurrency, as Nigeria’s financial regulator had ruled out cryptocurrency as a currency for legitimate business transactions, stating that it is used to finance crimes such as terrorism, and that no respectable investor wants to be associated with it.

However, Tesla, Twitter and Microstrategy’s involvement, including the latest entry of Mastercard, has invalidated CBN’s claim, and further legitimise cryptocurrency assets in business transactions globally.

Note that the CBN ban preventing banks and other financial institutions from supporting cryptocurrency exchanges hasn’t stopped the transaction of cryptocurrency in Nigeria, as users engage in peer-to-peer, but it has slowed it down, and further made the crypto market volatile in the eyes of investors.

By Fakoyejo Olalekan…

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