Mixed reactions continue to trail the recent directive of the Central Bank of Nigeria (CBN) directing banks in the country to close accounts linked to cryptocurrency operators, with Economic analyst, Tope Fasua, on Tuesday said central banks will have no option but to issue their own digital currencies eventually.
Fasua said while no central bank will wholeheartedly support Cryptocurrency, about 60% of central banks across the globe are under pressure to issue these sovereign digital currencies.
This he told finance journalists during the virtual February edition of the Finance Correspondents Association of Nigeria (FICAN) monthly forum on Tuesday, is given the sudden rise in value and acceptability of Cryptocurrencies and the ever present search by investors for alternative investment outlets for their money.
According to Fasua, Chief Executive Officer of Global Analytics, about five countries: China, Ecuador, Senegal, Tunisia, and Singapore have issued digital currencies, rather than Cryptocurency, stressing that central banks would be in trouble should cryptocurrencies really take off and replace traditional currencies.
Specifically, he said although quite a number of bankers have invested in cryptos just to hedge their bet, the traditional financial system is deeply rooted, organized and backed by government, unlike the Cryptocurrency mining space.
This is coming at a time when Godwin Emefiele, the Governor of the CBN, on Tuesday honoured the invitation of the Nigerian Senate to shed light on the recent ban placed on cryptocurrency-related accounts in the country.
However, Fasua who spoke on: “Ban on Cryptocurrency-related accounts in Nigeria and concerns of global central banking,” said proponents of the cryptocurrency believe that there is a need to push back and do something different, that will mimic the attributes of a gold-backed currency in view of durability and scarcity, and yet be better than the current system by being smart, secure and not possible for central banks to issue at will.
Continuing, he said, “if it started as a rebellion (which is the case), then you must think of the incentive for the global economy to sign on to that rebellion with you against the devil they know. This then means that until there is global acceptance of the currencies, it will continue to be easy to create panic in the crypto world and big players can dump the currency when they have achieved gains.
“It then becomes worse than the stock market because, for cryptocurrencies, the fundamentals are non-existent, apart from an analysis of how many are adopting the currency and who is winning between an established traditional banking system and the new kids on the block.”
Cryptocurrency, he stressed, is heading to single global currency with a major challenge being that there are a lot of loses in it and that when most coiners die, no one is able to access their investments which ab initio are encrypted with passwords, passphrases and whatnots.
“People don’t usually plan to die. Now, this is where regulation helps in the financial markets. Apart from deposit insurance, which kicks in, in the event of the collapse of an insured and regulated financial institution, the relations of a dead account holder in a traditional bank could still have access to their balances,” Fasua stated.
Also speaking at the forum on the “Imperatives of SMEs as alternative source of income post COVID-19,” an entrepreneur and the Creative Director, Eleven Squared Enterprise, Libby Ofem-Oke, said although the pandemic came with a lot of challenges, there are people still taking advantage of opportunities created by it to cash out.
She urged Small and Medium-scale Enterprises operators to leverage social media to opens the door to new markets, harness countless opportunities that come with the new normal.
Offem-Oke wants entrepreneurs to always see challenges in the Nigerian operating environment as stepping stones, while staying focused, stressing that to stay relevant, SMEs must keep rebranding, not minding the cost.
According to her, although “the system is frustrating… don’t give up.”
She further advised startups to structure their ideas if they are to obtain funding from financial institutions, I addition to evidence of registration with the Federal Inland Revenue Service for tax, anti-money laundering certificate, as well as Lagos residence permit for those operating in Lagos State, trademark among others.