Fun

IMF Representative of Nigeria Calls for Caution Over the Use of Cryptocurrencies

News Feed - 2021-02-20 09:02:47

IMF Representative of Nigeria Calls for Caution Over the Use of Cryptocurrencies


The International Monetary Fund (IMF) resident representative for Nigeria, Ari Aisen recently discussed the Central Bank of Nigeria (CBN) directive that targets crypto entities. In remarks made during a special virtual press briefing, Aisen repeats some of the CBN’s claims that cryptocurrencies were being used “for illegal transactions such as money laundering and drug trafficking.” CBN Acting in the Interests of Financial Sector Stability


According to a report, Aisen, who says that other central banks have taken similar action, believes that “some care should be taken” concerning the use of cryptocurrencies. In an apparent justification of the directive, Aisen suggests that the CBN only wants a solution that will be “in the interest of the payment system and the sustainability of the financial sector.”


However, during the same briefing, Aisen also calls on Nigerian monetary authorities to consider the “unification of foreign exchange rates.” While the CBN maintains the naira’s exchange against the US dollar at 380:1. The parallel market, on the other hand, offers a significantly higher rate of 475:1.


Meanwhile, by maintaining an overvalued exchange rate, the Nigerian government is able to easily meet its obligations. Yet, on the other hand, this overvalued exchange rate is partly blamed for the plummeting monthly cross-border remittances into Nigeria. According to Nairanalytics, remittances, which are a vital foreign exchange source, dropped from the high of $2.05 billion in January 2020 to just $54 million by September of that year. Tale of Two Exchange Rates


In the meantime, in his remarks, Aiesen attempts to convince the CBN to move towards the unification of the exchange rates as well as the transparent management of this resource. The resident representative is quoted saying: It would be useful to unify rates to allow the currency fluctuate as well as to make forex more accessible to those in need.


The Nigerian government, just like its peers across the African continent, has seen its revenues drop significantly due to the effects of the Covid-19 pandemic. In addition to the dropped revenues, Nigeria is facing ongoing shortages of foreign exchange which in turn adds pressure on the local currency.


To mitigate some of these challenges, the IMF representative is advising the Nigerian government against raising taxes. Instead, Aisen urges Nigeria to strengthen the tax administration by expanding the tax base and block leakages.


What are your thoughts on the remarks that were made by the IMF resident representative? Tell us what you think in the comments section below. As Millions Drown in Today’s Poverty Trap, Macro Strategist Raoul Pal Says "Bitcoin Is a Life Raft" ECONOMICS | 2 days ago Spanish Treasury Secretary Says Cryptocurrencies Carry a "Risk of Default", Repeats Bank of Spain"s Lack of Regulation Rhetoric ECONOMICS | 3 days ago Tags in this story bitcoin remittances, CBN crypto ban, Central Bank of Nigeria, COVID-19, Cryptocurrencies, Foreign exchange, IMF, International Monetary Fund, Money Laundering, naira, parallel market


Image Credits: Shutterstock, Pixabay, Wiki Commons Spot-markets for Bitcoin, Bitcoin Cash, Ripple, Litecoin and more. Start your trading here. Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments

News Feed

XRP Price Risks Crash Below $2 As Correction Takes Hold, Here’s Why
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Tether and Taipei University boost blockchain and digital asset education
Savannah Fortis2 hours agoTether and Taipei University boost blockchain and digital asset educationTether partners with Taipei University to advance blockchain and digital asset education, aiming to equip students with e
Crypto Industry’s Favorite Messaging App Telegram Surpasses 500 Million Active Users
Crypto Industry"s Favorite Messaging App Telegram Surpasses 500 Million Active Users Telegram, a popular messaging app within the cryptocurrency space, surpassed
William Suberg21 minutes agoBitcoin bears ‘in control but exhausted’ as BTC price retakes $29KBitcoin stages a recovery toward a key resistance but fails to break through, and BTC price action is giving some cause fo
Chainlink Price Shows Signs Of Recovery — Why $15 Is The Level To Watch
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Bitcoin, Ethereum Technical Analysis: BTC Heads Lower on Saturday, as FTX Saga Continues
Bitcoin, Ethereum Technical Analysis: BTC Heads Lower on Saturday, as FTX Saga Continues In a week of turbulence, cryptocurrencies maintain this sentiment into the weekend, with bo
Federal Reserve Hikes Rate by 50bps, FOMC Signals Rate to Rise to 5.1% Next Year
Federal Reserve Hikes Rate by 50bps, FOMC Signals Rate to Rise to 5.1% Next Year The U.S. central bank’s Federal Open Market Committee (FOMC) convened on Wednesday and raise
Visa to Approve Cryptocurrency Card by Australian Startup
Visa to Approve Cryptocurrency Card by Australian Startup Visa is reportedly set to approve Australian crypto startup Cryptospend’s issuance of debit cards
Coinbase CEO Says Apple’s Crypto Policy Raises ‘Potential Antitrust Issues’
Coinbase CEO Says Apple"s Crypto Policy Raises "Potential Antitrust Issues" The CEO of the Nasdaq-listed cryptocurrency exchange Coinbase, Brian Armstrong, says Apple has not playe
US Financial Services Committee leaders want ‘regulatory sandboxes’ for AI
Tristan Greene7 hours agoUS Financial Services Committee leaders want ‘regulatory sandboxes’ for AIIn a letter signed only by republicans, the committee responded to a request for information sent by the Department o
Bitcoin Miner Maker Ebang Narrows First Half Loss To $7 Million, as Covid-19 Hit Demand
Bitcoin Miner Maker Ebang Narrows First Half Loss To $7 Million, as Covid-19 Hit DemandEbang International Holdings Inc., the Chinese maker of bitcoin mining hardware, reported a ne
Crypto market crash triggered by ‘aggressive’ selling by Jump Trading: Report
Zoltan Vardai11 hours agoCrypto market crash triggered by ‘aggressive’ selling by Jump Trading: ReportJump Trading significantly contributed to the crypto market sell-off, and it could be looking to sell another $104