The Association of Bureaux De Change Operators of Nigeria (ABCON) on Tuesday charged the Central Bank of Nigeria (CBN) to introduce measures that would counter the use of cryptocurrencies for Diaspora remittances.
The group argued that the rise in the adoption of cryptocurrency exchanges by the public could be responsible for the wide drop in Diaspora inflows to the country.
According to ABCON, its Quarterly Economic Review for Q1 2021, the association noted that such measures by the CBN were necessary to redirect Diaspora remittance inflow away from cryptocurrency exchanges to official channels.
Although ABCON commended the CBN for the N5 per dollar rebate scheme introduced to encourage Nigerians in Diaspora to use official channels for remittance transfer, it, however, noted that the apex bank needs to address other issues driving the patronage of cryptocurrency exchanges for remittance transfer.
The group maintained that the insecurity in the country was giving cryptocurrency greater prominence as investors and citizens are finding it a safe haven for their wealth in case of any eventuality.
“In most Emerging Markets Bitcoin transfers surged last year, as the pandemic exposed the cheaper and more efficient digital remittance services.
“Migrants sending money across borders to their families prefer the minimal transaction costs of cryptocurrency exchanges against the exorbitant costs of traditional money transfer companies like Western Union.
“Cryptocurrency transactions are faster than the conventional transfers, which require passing through banks reliant SWIFT, the sluggish, half-century-old interbank messaging system that handles cross-border payments.
“These exchanges override the political complications of official channels. The global reach of cryptocurrencies avoids the inflation risk inherent to official currencies, especially in politically unstable countries reliant on fickle foreign investors.
“Thus, while we commend the efforts of CBN in introducing the package of Five Naira for One Dollar transfer, it can be seen from the analysis above that the challenges exceed just non-payment of foreign currency by the IMTCs and the exchange rate.
“Strategies that satisfy the most sensitive of these advantages of Cryptocurrency exchanges must be introduced to redirect flows to the official channel,” the group said.