Blockchain technology and cryptocurrencies have truly disrupted the world as we know it. It has brought paradigm shifting innovations with it that many governments of the world are yet to totally decipher. This has led to the indirect banning of the emerging technology in nations such as Nigeria, China, Ecuador, Russia, Bolivia, and Vietnam to mention a few.
When discussing the astronomical surge of crypto adoption in Nigeria and how competent the Nigerian youths have proved themselves to be, the Country Manager for Luno in Nigeria, Owen Odia notes:
“We’re a special place and a special economy. Considering that we try to be at the forefront of technology and innovation, it’s only normal that we would want to take advantage of technology like crypto,”
Odia notes that:
“Besides speculators, some people use it for micropayments, others use it for remittances, and there’s a growing number of people who buy and sell crypto by taking advantage of its daily fluctuations,”
Just recently, the Nigerian government joined the league of other countries that block crypto transactions in their terrain by releasing a CBN Circular banning banks and other financial institutions from facilitating crypto transactions. With the many benefits that the crypto financial system advances, one begins to wonder if these countries just want their citizens to have fun staying poor.
Many prominent Nigerians such as Odia, Kingsley Moghalu and Prof. Yemi Osinbajo has highlighted that what governments like the Nigerian government need to be doing is leveraging the emerging technology and looking for ways that Nigeria can become an international hub for digital currencies instead of indirectly banning the same. Odia notes that if Nigeria can attempt to regulate exchanges like Luno instead of intercepting their activities, users will become more confident in dealing with these exchanges.
First, the Nigerian government may tour the path of allowing banks and other financial institutions process crypto transactions with tightened Know Your Customer enforcement mechanisms in place especially for banks and centralized crypto exchanges like Binance and Luno. The government may also enjoy sources of revenue from mandating banks to collect taxes from crypto merchants, these banks will in turn remit the same to the government as taxes on transactions and income made.
These and many more are possible regulatory and revenue generating means that the Nigerian government can benefit from cryptocurrencies instead of trying to restrict the sector growth.
What are your thoughts on how the government can benefit from the emerging sector?
Let us know in the comment section below.