The International Monetary Fund (IMF) has cautioned against transacting in cryptocurrency, saying regulating the digital currency remains a concern not just to the Central Bank of Nigeria (CBN) but to other regulators across the world.
The IMF Resident Representative for Nigeria, Mr. Ari Aisen, said this during a virtual media briefing on the Fund’s Article IV on Nigeria that was released last week.
The CBN in the circular cautioned deposit money banks (DMBs), non-bank financial institutions (NBFIs) and other financial institutions (OFIs) and members of the public on the risk associated with transactions in cryptocurrency.
Responding to a question on the apex bank’s action, Aisen noted that a lot has been changing regarding the payment system, saying that, “the issue with some of these cryptocurrencies is that perhaps some care should be taken about their activities and the use of cryptocurrencies.”
He added: “Actually, central banks, not only in Nigeria have this concern about what kind of activities that cryptocurrencies might be supporting and how best to monitor those activities.
“Some of them are involved in illegal activities; some may be related to money laundering, even drugs and other initiatives and it is natural that the authorities would be extremely concerned about how best to supervise, improve and supervise the use of cryptocurrencies.” He pointed out that there remains a dilemma around how best to regulate the digital currency.
“We know that the Central Bank of Nigeria is concerned about it and trying to decide the best policy around this for the benefit of the payment system and the sustainability of the financial system,” he added.
With the current rise in the price of crude oil, the IMF official said it would be difficult to say what level of crude oil price would allow Nigeria to stay afloat and come out from the recession faster. This, he said was because of oil price volatility.