By John Apollos Maton, Esq
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INTRODUCTION
There are many misconceptions that surround digital trading and currencies, to try to explain, I have browsed through notes by Investopedia and Wikipedia who had some very interesting things to say about these.
Foreign Exchange Market is a global decentralised market for trading of currencies. This market determines foreign exchange rates for every currency. It includes all aspects of buying, selling and exchanging currencies at current or determined prices.
Forex Trading is the means through which one currency is changed for another. When trading forex, you are always trading a currency pair – selling one currency while simultaneously buying another.
Cryptocurrency is digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralised networks based on blockchain technology – a distributed ledger enforced by a disparate network of computers. Their most defining feature is not being issued by any central authority, rendering them theoretically immune to FGN interference or manipulation.
Bitcoin, first released as open-source software in 2009, is the first decentralised cryptocurrency. Since it’s release, there have been hundreds of others created, their total value roughly being 251.8 billion dollars as of date.
For more detailed discussions on the subject and operations, there are many sites online that can be accessed for such information.
THE ISSUE
Despite Federal Government (FGN) propaganda, youth unemployment is at an all-time-high! Even after deducting the huge numbers that leave the country for greener pastures, those who set out to be self-employed and the likes, there simply are not enough jobs for the remaining hundreds of thousands of new graduates the education system churns out annually! This depressing situation has the youth concluding that the dream of going to school, finishing with good grades and getting a high-paying job as painted by the older generation is nothing but a scam, the need to clamour for higher and better qualifications a cruel joke.
To help alleviate this growing unemployment and the dissent and unrest among the youth, the FGN had as far back as 2019 advised the youth to engage in forex trading, it acknowledged that this will help the youth be engaged in meaningful and legitimate means of making money.
The surprise came in a letter to financial institutions on the 5th of February, 2021, headed “Letter to All Deposit Money Banks, Non-Bank Financial Institutions and Other Financial Institutions”, the central bank of Nigeria (CBN) directed; the closure of bank accounts of persons who operate cryptocurrency exchanges, prohibition of cryptocurrency exchanges, threaten severe regulatory sanctions. As an agency of FGN, this recent directive by the CBN conflicts with the FGN’s policy of encouraging youth entrepreneurship legitimate source of income and self-employment. It really is difficult to understand why in one breath it encourages and in another it makes more difficult, if the CBN had consulted experts, they would discover that most profitable sites and brokers make use of cryptocurrency to fund the transaction of these trades.
While there would be people who argue that using cryptocurrency is not the only way to trade – and I agree it is not, what this has done is make the market more difficult in the sense that apart from the youth that now have millions of dollars in these currencies stuck without warning because they were trading on various platforms, access to funds will become slower as overambitious banks are more likely to indiscriminately block legitimate transactions simply because most of the people who are at the forefront of the implementation of this policy do not themselves understand the basics. This is probably why the policy has been viewed by many experts as ill-advised and not properly thought through.
CBN in a statement to quell the outrage that followed their letter started by lying that the ban was not a new position, then gave a list of other countries they claim have also done same, which made their other statements about the ban being to stop the funding of illegal activities even less believable. A review of their referenced 2017 letter showed only a caution to the bank and public to beware of using cryptocurrency due to the ease of fraud associated with it, and not an outright ban as they claimed.
CONCERNS
FGN through the CBN has argued that this move is mainly to protect the general public from fraud and other forms of crime that is facilitated by these digital currencies, the question then becomes “is it responsible for all the other more grievous crimes the government has been unable to solve?”. Terrorism, Kidnapping, Embezzlement, abuse of power, and so many other issues are poised to overwhelm the government and the citizenry, why would the government intentionally bring a policy that feeds the youth to opportunist who would exploit their lack of income? No matter the excuse, by not seeing the benefits of cryptocurrency all CBN is doing is “throwing away the baby with the bath water”.
There are many groups and influential personalities who claim this ban is nothing but a furtherance of the NIN policy, and attempt by government to put policies in place to stifle opposition, EndSARS organisers among others and cripple the organisation of other protests against its incompetence and bad governance. The suddenness of the implementation of the policy, especially without prior warning, does lend credence to these views and strengthens the oppositions argument that this administration is merely a dictatorship masquerading as a democracy.
I fear if nothing is done to reverse this policy and have real experts lay proper guidelines for operation of cryptocurrency in Nigeria, it will not only fuel the underlying unrest from the “EndSARS” protest and the Youth, but also fear which will cause investors to pull out their money from initiatives not only in currency but also in science and technology since FGN’s policies are now seen to be erratically irregular and Nigerian youth to bank with neighbouring countries.
SOLUTIONS
Very simply, mandate the CBN to reverse its directives to banks and other financial institutions while FGN through House Committees on Banking and Currency, Finance, and other related committees in collaboration with experts and enthusiasts in the private sector to investigate the related issues and concerns of FGN and provide best approach to cryptocurrency, with suggested policies and laws on best practice.
FGN should introduce Cryptocurrency and Forex Trading into the Nigerian education curriculum, help the youth grow and develop while knowing the truth about it and armed with knowledge to possibly build one that works for Nigeria and Africa as a whole. The giant of Africa should lead in tech and development not cower from innovation.
CONCLUSION
Every new policy of the FGN, emphasises the need for young people to be in charge of policy making associated with tech, science, sustainable development and the likes. It does not make sense that the youth represent more than 50% of the population yet get no say on policies that affect their lives and struggle for survival.
The government has to pay more attention to the people and what they want, it is the people’s servant after all, not the master.
ABOUT
John Apollos Maton Esp. DRS. ChMC. ACIArb (UK).
John (aka Macham) is the first of four children born to Mr. & Dr. Apollos Maton of Bokkos LGA, Plateau State, Nigeria.
He is a Dispute Resolution Specialist that is passionate about Sustainable Development, Competent Leadership, Human Rights Protection, Education, Poetry and Physical Fitness.
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