By Amos Tauna
A Senior Partner, Law Allianz, Yahaya Maikori, has observed that Block chain technology has brought its disruptive nature into the financial system ushering in a new type of currency known as digital or virtual currency.
He said the Block chain technology has steadily caught on in Nigeria with various publications seeming to point at Nigeria as the largest market in Africa.
Speaking on “Blockchain & Cryptocurrency in Nigeria: Legally Speaking”, he noted that
the informality and ease of use of this currency aligns perfectly with the country’s financial culture.
He explained, “Globally speaking the legality or otherwise of this phenomenon depends on the country; it ranges from regulated, unregulated, restricted to out rightly banned. Some countries classify virtual currency (VC) as money and legal, some classify it as an asset and legal, while in some it’s neither illegal nor legal, have no legal frameworks in place.”
He further explained, “Russia, Ecuador and Bangladesh have outrightly banned bit coin (a type of VC); in China, bitcoin is illegal for commercial use but legal for private purposes. In the United Kingdom like most countries, virtual money is still unregulated that is, it has no legal framework in place.
“Back home the Central Bank of Nigeria has proactively set up an industry committee to articulate a road map for blockchain & cryptocurrency regulation though it has also cautioned the populace, while Nigeria Deposit Insurance Company (NDIC) categorically stated that bitcoin is not legal tender.
As the CBN looks at this new development, he said, “They need robust consultations with key stakeholders and related institutions. Some of the key issues for determination however include the application of the extant tax regime especially VAT and how to plug the holes that enable tax evasion; how to protect people from scams and children/vulnerable people from sale of drugs, enforcement against unethical and illegal activities, plug holes that encourage the hiding of assets, proceeds of corruption, money laundering and the financing of terrorism – which Nigeria is already notorious for.”
The legal practitioner noted that other critical issues for consideration are how to create unique identification, which protects people from the loss of private keys as well as creating digitals rights for IP protection.
He opined that though the industry is in its infancy and still subject to a lot of debate about the pro and cons, adding that one thing is certain “it is unstoppable” and can certainly become a tool in the hands of CBN for the promotion of its regional trade objectives like ECOWAS and NEPAD as well as promote Nigeria’s cash less economy policy.
