CBN needs to adopt blockchain technology – Osinbajo

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Vice-President Yemi Osinbajo has said Nigeria may need to further broaden the scope of its banking licences in order to accommodate more players in the financial mediation value chain.

Osinbajo said this on Monday during his keynote address at the 3rd edition of the Nigeria digital economy summit in Abuja.

Speaking on the theme ‘web 3.0, blockchain and DeFi: impact of Africa’s digital economy’, the vice president urged central banks around the world to adopt blockchain technology.

Osinbajo said blockchain technology, which allows digital information and transactional records to be securely stored and distributed, might disrupt central banking globally if it was not absorbed into the system.

In 2021, the Central Bank of Nigeria directed banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

“From a policy perspective here in Nigeria, we may need to again expand the range of banking licenses available to enable more players in the financial mediation value chain.

“Even central banks all over the world will have to rethink their roles since blockchain will challenge the centralisation of monetary authority with its clear imperfections.

“Who knows? We might actually be in the last days of the central banking system as we know it.

“It is either the central banking systems all over the world will adopt blockchain technology, or they will be taken over by blockchain technology.

“We are certainly, in my view, the last of the central banking system; which means the space is open for all sorts of innovation in the central banking,” Osinbajo said.

The vice president further said clear rules must be set to support crypto markets and trading in other digital assets.

He said it was evident that the same old banking licences that were in use were no longer tenable.

“In the past, there was only one type of banking licence that cost N25 billion in the past few years. These are excellent policy changes that took place with a lot of pressure from young men and women in the tech and entertainment space.

“The CBN has modified and there are different types of banking licences which is why we have fintechs, the unicorns because they are using different cadres of CBN licence that do not require N25 billion share capital.

“So, for example, Kuda and several others have a different type of licence. Flutterwave and Paystack are in some form of banking,” he added.

 

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