CBN may issue licenses to cryptocurrency exchanges soon

The Central Bank of Nigeria is likely to issue operating licenses to exchange that enables trade in the buying and selling of cryptocurrencies very soon, according to an expert.

Lucky Uwakwe, co-founder of Cheetaafrica.org disclosed this at the Luno Meetup which held in Lagos on Saturday, 8 December, 2018.

Uwakwe who has collaborated with the CBN on different occasions in its efforts to study the new blockchain landscape and cryptocurrency market in Nigeria said the body-language of the apex bank is currently at neutral level. The CBN is no longer telling people that trading in cryptocurrencies is dangerous but just issuing caution with regard to the risks the market experiences.

This is following a global trend in which authorities are beginning to realize the potential of cryptocurrencies to disrupt financial services. Only recently Christine Lagarde, head of International Monetary Fund (IMF) called on central banks to consider a state-backed cryptocurrency in order to provide safety nets for citizens’ investment and also take advantage of an evolving financial system led by technology.

Owenize Odia, country manager of Luno Nigeria said that a regulated cryptocurrency market will be a welcome development for exchanges as it will build investors’ confidence and increase adoption.

The company affirms that issuing licenses to exchanges will bring trust to the cryptocurrency market in Nigeria. Interest in bitcoin is increasing. After an important recovery from a sharp fall in prices, public interest in bitcoin rose dramatically to a 4-month high. Google Trends also shows that the highest level of interest for this period was recorded a week ago, and since then, the trend has remained above normal levels.

The company said it is investing significantly in education having identified the need to keep its user well informed to enable them make better investment decisions.

“We believe that cryptocurrencies is the future of money,” Odia said during a panel session.

Luno which was launched in 2013 operates in forty countries and services almost three million customers. So far it, it has seen transaction volumes reach $3 billion and growth rate beyond 20 per cent.

A survey of one thousand people conducted by Luno Nigeria recently showed that 65 per cent were familiar with cryptocurrency. 25 per cent said own a cryptocurrency while 29 per cent own bitcoin and Ethereum.

51 per cent view cryptocurrencies as investment while 19 per cent say they use it for remittance. 16 per cent have used it to make an online purchase and 11 per cent made transfers to family and friends using cryptcurrencies.

Odia disclosed that it has plans to increase its physical presence in other parts of Nigeria as well as explore 20 new markets in Africa from 2019.

“We are the crypto bank for Africa,” she said.

In a statement released to BusinessDay, Marcus Swanpoel, co-founder and CEO of Luno said leveraging technology has the potential for meaningful and long-term positive impact on every member of the society.

“Upgrading to this better financial system will empower billions of people by ultimately lowering their cost of living, providing them with more and better economic as well as new decentralised products and services, increase the value retention of their wealth, and overall providing more financial freedom,” he said.