The debut and quick rise of cryptocurrencies have agitated the financial industry. The long-established financial sector, notably commercial banks, is challenged by this disruptive innovation as they struggle with the basic underpinnings of their sector.
With their decentralized structure and use of blockchain technology, cryptocurrencies bring about a paradigm shift that requires attention. Commercial banks, however, are skeptical and concerned about the possible repercussions it may bring rather than excitedly embracing this transformation.
Preye Itonyo, the Deputy Director of the Digital Economy Development Department of NITDA, stated that commercial banks are wary about using cryptocurrencies as a form of payment during the Digital Assets Summit, which SiBAN held in Abuja, Nigeria.
This is due to the fact that cryptocurrencies appear to replace the conventional functions of commercial banks. Users of cryptocurrencies can conduct business without using a traditional banking system.
Furthermore, he said that people’s misperceptions of blockchain, the technology that underpins cryptocurrency, are the cause of this concern. A more thorough comprehension of blockchain’s workings would promote a setting where the technology’s promise is fully realized for everyone’s benefit.
It is important to remember that in 2021, the Central Bank of Nigeria, which oversees commercial banks, gave all banks the order to stop enabling crypto transactions for their clients.
The regulation also applied to businesses that had accounts with these banks, which had an impact on the nation’s crypto market.
Knowing blockchain and what it does
Senator Ihenyen, the former president of SiBAN and lead partner at Infusion Lawyers, stressed the significance of comprehending blockchain technology and stated that one of the objectives of the cryptocurrency business in Nigeria is to leverage cutting-edge technologies to produce wealth for its population.
He said that nations that utilize technology positively and actively will profit, particularly in the case of blockchain technology.
Governments should welcome and control the people or entities using the technology rather than opposing or obstructing it since the technology itself is neutral; what counts is how it is used.
The lawyer used Dubai as an illustration of a location that effectively used this strategy. Dubai has attracted more investors by being open to technology and establishing helpful policies, which has boosted its economic growth through the usage of blockchain technology.
How to safeguard investors
Preye mentioned that NITDA is approaching the market from a developmental perspective when discussing how investors would be safeguarded in the sector, which is seen as volatile. This has to do with the development of crypto-based goods and how they are built to safeguard users.
The National Blockchain Policy, which was introduced earlier this year, was noted by the speaker as a plan for creating a safer sector that would prosper and be advantageous to all parties involved.
He continued by saying that Nigeria is now in the policy’s implementation phase, which entails listening to industry players to learn about their difficulties and working with them to develop solutions that are efficient.
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