Blockchain technology will disrupt traditional banking in the coming years, Nigeria’s Vice President believes. Speaking at a recent event, he rebuked the recent ban on digital currencies, advocating for Nigerian authorities to regulate the industry.
Yemi Osinbajo was speaking during a recent Bankers Committee meeting. He addressed several issues facing the Nigerian economy, calling for the financial services industry to adopt new digital approaches to stay competitive.
On the “very topical issue of blockchain technology,” the vice president stated, “There’s no question that blockchain technology in general, and cryptocurrencies in particular, will in the coming years challenge traditional banking, including reserve banking, in ways we can’t yet imagine. We need to be prepared for that seismic shift.”
This shift may come sooner rather than later, he pointed out. Already, remittance services are being challenged by digital currency-based services that are faster and more cost-efficient. SWIFT has been one of the most adversely affected, with its five-day delay and high fees leading to the exodus to blockchain-based services.
In Nigeria, this shift has already started happening, with Bitcoin SV wallet Centbee being among the leaders of blockchain-based remittance services. The South African company’s Minit Money service allows Nigerians to send funds in seconds on the Bitcoin SV blockchain. With Bitcoin SV charging less than $0.001 per transaction, the service is the cheapest in the market.
“Blockchain technology will provide far cheaper options to the kind of fees being paid today for cross-border transfers by banks,” Osinbajo stated.
Nigeria’s VP also delved into the recent ban by the Central Bank of Nigeria which prohibited banks from processing digital currency transactions. CBN has been acting to curb the possible abuses of digital currencies, he observed. However, a complete ban is too extreme, he believes.
“There is a role for regulation here. It’s in the place of our monetary authorities and the SEC to provide a regulatory regime that addresses these serious concerns without necessarily killing the goose that might lay the golden egg. It should be thoughtful and knowledge-based regulations, not prohibition. […] We must act with knowledge, and not with fear.”
CBN acknowledged the VP’s advice on regulating digital currencies.