Fintech and crypto are changing the world of finance

Nigerian Central Bank Governor and Bitcoin critic Godwin Emefiele recently noted that the rise of fintech and crypto, among other technologies, has forced banks and financial institutions to change the way they do business.

Nigeria’s Central Bank appreciates innovation brought by fintech and crypto

The governor of the Central Bank of Nigeria (CBN), who has been very critical of cryptocurrencies and Bitcoin in the past, explained how, in his view, crypto and fintech are radically changing the way banks and financial institutions operate.

And it is on the back of this that, according to Emefiele, Nigeria needs to rethink the way it understands finance and needs to regulate cryptocurrencies and the fintech world in general.

In this regard, the governor stated:

“In order to ensure the relevance of monetary policy and the role of monetary authorities in the new digital world, MPC members must embrace themselves with [an] advanced level understanding of the interplay of digitalization with monetary policy objectives, targets and tools”.

On the same occasion, the governor also said that Bitcoin, properly regulated like all digital currency markets, could probably also become legal in the country in the near future.

What follows are the governor’s exact words:

“We are committed in the CBN, and I can assure everybody that digital currency will come to life even in Nigeria […] Under cryptocurrency and Bitcoin, Nigeria comes 2nd, while on the global side of the economy, Nigeria comes 27th. We are still conducting our investigation, and we will make our data available”.

The use of cryptocurrencies in Nigeria

The adoption of cryptocurrencies in Nigeria has been growing in recent years. Nigeria ranks sixth according to the latest Global Crypto Adoption Index report by the company Chainalysis. According to some surveys, about 35% of Nigerians have invested in cryptocurrencies or are in possession of them.

In October last year, an early version of the eNaira, a digital state currency issued by the Central Bank of Nigeria, was also launched. This is quite peculiar, thinking that in February 2021 the same Nigerian central institution had ordered all banks to desist from transactions in and with crypto entities.

In addition, the CBN had also ordered banks to close the accounts of people or entities involved with digital currencies within their systems.

However, criticism of cryptocurrencies was mainly directed at the fact that since they were not regulated they could pose a risk to the country’s financial stability. For the Central Bank, if regulated and controlled, cryptocurrencies can be an important tool for inclusion.