ABCON asks CBN to test impression of cryptocurrencies on diaspora remittances

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The Association of Bureau De Change Operators of Nigeria (ABCON) has requested the Central Bank of Nigeria (CBN) to introduce measures that can neutralize the optimistic results of cryptocurrencies as a channel for diaspora remittances.

This is to redirect diaspora remittances away from cryptocurrency exchanges to official channels and in addition defend such in opposition to potential disruptions.

This name was made by ABCON throughout its Quarterly Economic Review for the primary quarter of 2021 the place it counseled the CBN for the N5/$ rebate scheme launched to encourage diaspora Nigerians to make use of official channels to remit their funds.

However, the affiliation noted that the apex financial institution wants to deal with different points driving the patronage of cryptocurrency exchanges for remittance transfers.

What ABCON is saying of their assertion

The affiliation in its assertion mentioned, “It is noteworthy that public acceptability for cryptocurrency exchanges are rising which could be quite accountable for the wide drop in diaspora inflows to Nigeria. Insecurity in the country is giving it greater prominence as investors and citizens are finding Cryptocurrency a safe haven for their wealth in case of any eventuality.

In most Emerging Markets Bitcoin transfers surged last year, as the pandemic exposed the cheaper and more efficient digital remittance services. Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.”

According to ABCON, “Cryptocurrency transactions are faster than the conventional transfers, which require passing through banks reliant SWIFT, the sluggish, half-century-old interbank messaging system that handles cross-border payments.

These exchanges override the political complications of official channels. The global reach of cryptocurrencies avoids the inflation risk inherent to official currencies, especially in politically unstable countries reliant on fickle foreign investors.

Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the IMTCs and the exchange rate. Strategies that satisfy the most sensitive of these advantages of Cryptocurrency exchanges must be introduced to redirect flows to the official channel.”

ABCON additionally expressed issues over the nation’s big unemployment fee, urging the federal government to use radical approaches with using each typical and unconventional financial and political instruments to redress the development.

What you must know

  • It might be recalled that the apex financial institution had about 2 months in the past, warned the Deposit Money Banks, Non-Financial Institutions and different Financial Institutions against doing business in crypto and different digital property.
  • The CBN directed monetary establishments to right away shut the accounts of individuals or entities transacting in or working cryptocurrency exchanges, warning of extreme regulatory sanctions within the occasion of any breach of the directive.
  • The Securities and Exchange Commission (SEC) had just a few days in the past, revealed that it’s working with the CBN for a greater understanding and regulation of cryptocurrencies within the nation.

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