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Cryptocurrency Threat: Issue Sovereign Digital Money Economist Tells CBN

-by our correspondent.

Following the sudden rise in value and global acceptability of Cryptocurrencies as well as the appetite of investors for alternative places to profitably store their money, most Central Banks across the world are under pressure to issue sovereign digital currency.

An Economist and the Chief Executive Officer of Global Analystics,Tope Fasua, who disclosed this in Lagos at a virtual forum organized by the Finance Correspondents Association of Nigeria (FICAN) said Central Bankers have no option than to start issuing their own Digital Currencies.

According to him, about five countries namely China, Ecuador, Senegal, Tunisia and Singapore have issued independent digital currencies, as opposed to Cryptocurency, being fully aware of the potential danger cryptocurrencies pose to traditional currencies. Specifically, he said quite a number of bankers have invested in cryptos just to hedge their bet. But the traditional financial system is deeply rooted, organized and backed by government, unlike the Cryptocurrency mining space.

Chief Executive Officer of Global Analystics,Tope Fasua

This is coming at a time when the Governor of Central bank of Nigeria (CBN), Godwin Emefiele, has honoured the invitation by the Senate Joint Committee on Banking Insurance and other financial institutions over the ban placed on cryptocurrency-related accounts in the country.

However, speaking on the topic: “Ban on Cryptocurrency-related accounts in Nigeria and concerns of global central banking,” Fasua said the advocates of cryptocurrency believe that there is a need to push back and do something different, that will mimic the attributes of a gold-backed currency in durability and scarcity, but better than the current system in terms of being smart, secure and not possible for central banks to issue at will.

His words: “If it started as a rebellion (which is the case), then you must think of the incentive for the global economy to sign on to that rebellion with you against the devil they know. This then means that until there is global acceptance of the currencies, it will continue to be easy to create panic in the crypto world and big players can dump the currency when they have achieved gains.

According to him, Cryptocurrency is heading to global single currency but one major challenge is that there is a lot of loses in it and that when most coiners die, no one is able to access their investments which are encrypted with passwords, passphrases.

Cryptocurrency market statistics

“People don’t usually plan to die. Now, this is where regulation helps in the financial markets. Apart from deposit insurance, which kicks in, in the event of the collapse of an insured and regulated financial institution, the relations of a dead account holder in a traditional bank could still have access to their balances,” Fasua stated.

Also speaking at the forum on the “Imperatives of SMEs as alternative source of income post COVID-19,” an Entrepreneur and the Creative Director of Eleven Squared Enterprise, Libby Ofem-Oke, said though the pandemic has brought a lot of challenges, many people are still taking advantage of COVID-19 to cash out.

“In this period of new normal, Small and Medium Scale Enterprises operators should leverage social media because it not only opens the door to new markets, a lot opportunities exists therein, though there are challenges in the Nigerian operating environment, entrepreneurs should always see such as stepping stones and remain focused, SMEs should keep rebranding no matter the cost.” She said.

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