CEO of Nigeria’s Deposit Insurance Corporation (NDIC) Cautions Public of Risks in Cryptocurrencies

Umaru Ibrahim, the CEO and managing director of the NDIC, released a notice warning the public against heavy reliance on cryptocurrencies as payment options in the country.

The official press release by the corporation states that the CEO advises ‘maximum caution’ when dealing with cryptocurrencies. The comment were made during a courtesy call by the Board and Management of the NDIC in the Speaker of the Federal House of Representatives, Rt. Hon. Femi Gbajabiamila office in Abuja.

Umaru believes that digital currencies have both their positive and negative attributes but the risks involved with such assets is high. Some of the reasons given include the lack of recognition of these tokens as currency by the Central Banks around the world and the unregulated nature of the industry.

Umaru Ibrahim, MD/CEO, Nigeria Deposit Insurance Corporation (NDIC) and Chairman, NDIC Board of Directors Mrs. Ronke Sokefun present during the discussion on cryptocurrency regulation in Nigeria (Image: NDIC)

The depository insurance corporation functions as a safety net for depositors across banks and other financial institutions in Nigeria protecting them from losses in case the institution collapses.

Nigeria tops the list in interest in the search term “Bitcoin” as shown in the image below from Google Trends. The country is also seeing a spike in the number volumes of Bitcoin transacted on LocalBitcoins since the start of 2019 with the latest weekly volumes traded standing at 1.3 Billion Naira. Dash cryptocurrency is also creeping into the country as it aims to challenge Bitcoin’s dominance.

With the industry growing more and more in the country, top officials want to see regulations passed on cryptos.

Nigeria tops the Google Trend charts in the search results for the term “Bitcoin” in the past 90 days (Source: Google Trends)

The speaker of the House of Representatives, Femi Gbajabiamila, also talked on the need for authorities to take the necessary measures to regulate the field given the popularity in the country. He further stated,

“The NDIC and other safety-net participants in the country must not be left behind in the adoption of appropriate regulatory framework to deal with the prevalence of cryptocurrencies in the global financial space.”

The speaker further said that the House of Representatives is working of giving the NDIC its statutory authority without overlapping functions with the Central Bank. Femi expects the three organizations to work hand in hand to improve the regulation surrounding digital assets.