Blockchain technology regulators urged to enable innovation

Staekholders in the Blockchain Technology Association of Nigeria (SiBAN) have urged regulators to provide an enabling business environment for innovation to thrive, which would encourage more investments and create opportunities for the Nigerian economy.

This call was made in response to Vice-President. Prof. Yemi Osinbajo’s speech at the Nigeria Digital Economy Summit (NDES) with the theme “Web 3.0, Blockchain & DeFi: Impact on Africa’s Digital Economy.”
Osinbajo had stressed that blockchain technology regulators should think and develop appropriate policies and regulations that promote, rather than inhibit, innovation and commerce.
He emphasised the need for Nigeria to leverage emerging innovations for the growth of the economy.
Osibanjo stated that with the right approach, policy, human capital and potential, the nation can become a world leader in digital technology in all its various ramifications.
“A whole new world is unfolding before our very eyes, unlike Web 1 and 2 where we were relatively disadvantaged. In 1989 we didn’t have mobile phones so we could not take advantage of the reach and depth that mobile telecoms gave digital innovation and financial inclusion. We are now better positioned to be significant players in Web 3,” he said.
President, SiBAN, Senator Ihenyen noted that until the Central Bank of Nigeria (CBN) reimagines its role in today’s fast-changing banking and financial system, private sector-led blockchain innovations in the banking and financial system will continue to be stifled, resulting in a big loss for the economy.

According to him, in the face of unemployment, poverty, dwindling oil revenue, cost-pull inflation, and other socio-economic challenges facing the nation, there is no better time to review its policy and regulatory stance on emerging technologies, including blockchain-technology applications in the financial services industry, which is currently undergoing demand-driven disruption globally.

He acknowledged that while regulations in Nigeria’s banking and financial system have been innovative over the years, helping the country accommodate new players in Web 2.0, it is time regulators started reviewing their approach to regulating Web3-, blockchain- and DeFi-based innovations.

“Blockchain technology can be understood and appreciated as a third-generation Internet that can help anyone safely and securely store, exchange, or transfer anything of value; from intangible assets to tokenised tangible assets, without the need for a central authority, middleman, or third party. This is an unprecedented innovation in human history, which will permeate every industry and sector where there is a problem of trust. From our private sector to public sector, the problem of trust continues to get in the way of transactions, affecting both business and governance. Blockchain provides a ‘trustless technology’ that promises a solution to our trust issues,” Ihenyen stated.
He noted that CBN needs to review its anti-cryptocurrency directive of February 5, 2021, as its directive in the banking and financial system has, amongst other things, made cryptocurrency transactions in the country less transparent, thus impairing efficient and effective transaction monitoring and reporting.