April 14, 2024

Governor Of Nigerian Central Banks Talks Of Crypto And Fintechs

Godwin Emefiele, the governor of the central bank of Nigeria, is a known bitcoin critic. He recently talked about the rise of cryptocurrencies and fintechs amongst the numerous technologies that have resulted in changes in the way financial institutions and banks operate. Emefiele asserted that because of these changes, the Monetary Policy Committee (MPC) of the central bank had no other option, but to reconsider the way the financial system is regulated.

Financial system regulation

The Central Bank of Nigeria (CBN)’s governor, Godwin Emefiele asserted that a new path has to be outlined by the MPC, which will bring changes in the monetary policy of the country. The MPC was scheduled for a meeting on July 18th and 19th.

Emefiele discussed the issue at an MPC retreat, where the governor said that the new innovations and technologies were playing a key role in Nigeria’s development. Therefore, he said that the decisions taken by the MPC in the future will be aimed at enhancing the contribution that is made via these technologies.

He said that the operations of the financial system had undergone changes because of these cryptocurrencies and fintechs, which meant some rethinking is required. Emefiele stated that both domestic and global banking and financial sectors had undergone changes because of the evolution of machine learning, artificial intelligence, digital payments, cryptocurrencies, and fintechs.

Hence, he said that it was a must to go over the regulation, supervision, and implementation of the monetary policy to ensure the financial system can keep up. Even though there are uncertainties and risks associated with new innovations and technologies, Emefiele insisted that there are lots of benefits to consider as well, which include employment creation, reduction in poverty, and improved access to financial services.

Staying relevant

Reports also indicated that the CBN governor had asked the members of the MPC to get acquainted with the objectives and tools of monetary policy that are applicable in a world that is becoming increasingly digital.

Emefiele said that they need to take steps to ensure the monetary policy stays relevant, as should the role of monetary authorities, in this digital world. This can only happen when members of the Monetary Policy Committee (MPC) have an in-depth understanding of how monetary policy targets, objectives, and tools can be integrated with digitalization.

As far as the MPC retreat is concerned, the governor stated that this event was an important one because it gives a chance to the central bank to assess its own performance in the last few years.

Crypto regulation

Considering the rate of adoption of cryptocurrencies in Nigeria, it does not come as a surprise that the Central Bank of Nigeria wants to regulate this sector properly. It is certainly not the only central bank looking into the matter, as it has become quite a hot topic recently.

This was after the crash that occurred in the crypto market in May which resulted in hefty losses and made the vulnerabilities of the sector apparent.

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