28 Aug Nigeria hints at heavy-handed bitcoin regulations
At a recent conference of AML professionals, Central Bank of Nigeria (CBN), Deputy Director of Financial Policy and Regulation, Obot Akpan, labeled digital currency “dangerous” and a “channel for money laundering”. Mr. Akpan arrived at this conclusion because, in his words, it’s “not a legal tender of any country hence it has a borderless nature without jurisdiction”. These profound (and largely refutable) statements were not necessarily born of ignorance nor the desire to thwart rampant money laundering activities. Upon closer research, there are two unrelated, parallel forces which may be at work here. Firstly, Nigeria’s fiat currency, naira, has tumbled amid a stronger dollar, resulting in tighter foreign exchange trading rules in recent months. Add to which, the African continent’s bitcoin exchange and remittance bellwether, BitPesa, is openly exploring expansion into Nigeria, as early as late 2015. Secondly, the Financial Action Task Force (FATF) has scheduled a mutual evaluation of Nigeria for next year. The influential inter-governmental agency recently called for countries to adopt a risk-based approach to digital currencies. As recently as late 2013, FATF deemed Nigeria a “high-risk and non-cooperative” jurisdiction due to the insufficiency of the country’s AML regime and weak AML legislation. These pressures in combination with the language from the CBN suggest heavy-handed regulation in Nigeria’s not too distant future.