Judges, led by the Chief Justice of Nigeria, Walter Onnoghen and the Chartered Institute of Bankers of Nigeria (CIBN) headed by Prof. Segun Ajibola, yesterday in Abuja alerted Nigerians to the danger of transacting business in any of the emerging frontiers in the banking sector, especially virtual currencies.
The experts, who expressed worry over the challenges the development is already posing to orthodox financial intermediation models across the world, called for proactive measures to mitigate the impact of the trend.
The Central Bank of Nigeria (CBN) had issued a statement earlier in the year, barring deposit money banks and all other financial institutions from the operation of any form of virtual currencies, including bitcoins, ripples, magneto, litecoin, dogecoin, peercoin and one-line, stressing that they are not recognised as legal tenders in Nigeria.
Virtual currency is a medium of exchange that is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.
At the “17th National Seminar On Banking And Allied Matters For Judges,” which focused on “Emergence of New Frontiers in Banking and its Legal Implications”, Onnoghen restated the commitment of the judiciary to ensuring stability of the banking sector in Nigeria.
According to him, the Nigerian judiciary has an important role to play in the prompt, speedy and just dispensation of cases to protect depositors’ funds in order to shore up public confidence especially as it pertains to the activities of relevant stakeholders in the banking sector.
Onnoghen, who was represented by a Justice of the Supreme Court, Mahmud Muhammad, stressed the need to sustain public confidence in the judiciary and admonished the judicial officers to be proactive by not allowing technicalities to stand in the way of substantive justice.
Ajibola said the prevailing situation remained a disruption to the orthodox ways of conducting banking and finance in Nigeria, stressing that the country might be taken unawares unless proactive measures were developed to address the implications of the trend.
The professor, who also expressed worry over the growing level of cybercrime in Nigeria, urged the judiciary to help the industry combat the menace.
“One of the side effects of the disruptive technology, artificial intelligence and other new tools is the use of the same technology to undermine the control systems in banks and other financial institutions.
“Unfortunately, fraudsters are usually a step ahead of operators, and operators are usually a step ahead of regulators. This explains why policies and regulations aimed at fighting crimes, albeit cybercrimes, are more reactive than being pro-active.
“We need the judiciary to improve on the speed at which cybercrimes are tried and dispensed with. We need the judiciary to assist in strengthening the statutory framework for fighting cybercrimes in this country,” Ajibola said.
The Chief Executive Officer of First Registrars and Investor Services Limited, Bayo Olugbemi, advised Nigerians to study every innovation before patronising it.
Olugbemi, who is the second Vice President of CIBN, stated there was no legal backing for virtual currency in Nigeria, adding that the National Assembly must take a careful look at the innovations.
He said: “We should see how a new innovation is before we jump into it. A lot of times they defraud people with it, so we need to study it and see its capability before we start operating it.”
Speaking on “The Legal Perspective of Electronic Credit Schemes: Challenges and Solution Options,” a Partner in Aluko & Oyebode, Oludare Senbore, said the use of crypto-currencies as a means of executing transactions (especially cross-border), repatriating foreign investments from Nigeria and an investment asset, has been on the increase in the last couple of years.
According to him, it is pertinent to note that CBN does not currently have any regulation and its official position on virtual/digital currency transactions is to prohibit Nigerian financial intuitions from engaging in such transactions.