Wale Ameen
The emergency of cryptocurrency with the flagship coin, bitcoin has been nothing short of phenomenal since it was first announced in 2009.
It has been embraced by the more daring and adventurous lot of people but viewed with suspicion by many others who either do not understand how it works or just simply are stuck in the old and traditional ways of transaction.
As such it is still seen as a relatively unstable and unwelcome tool for financial transactions with the seeming volatility also not helping matters as to perceptions and how it is viewed by all.
Despite the Central Bank of Nigeria’s seemingly fearful stand on cryptocurrency and its adoption within the Nigerian banking system, it appears the idea is really a force whose time has come.
Recall that the Central Bank of Nigeria in a circular dated 5th February 2021, had reminded Nigeria’s regulated financial institutions that in pursuit to its earlier circular of 12th January 2017 which cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs) as well as other Financial Institutions on the risk associated with transactions in cryptocurrency, it was henceforth prohibiting any financial institution from dealing in cryptocurrencies.
Part of the circular then read:
“Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”
“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.”
This had initially rattled everyone within the crypto world and banks soon enough began sending mails to their customers of steps they would be taking to conform to the CBN directive, and this was to close all accounts associated with, or seen dealing in cryptocurrency either in terms of receiving or sending out.
An important point to note here is that the Central Bank of Nigeria did not ban cryptocurrency as that would imply banning crypto exchanges and even shut down the internet in order to achieve that, rather what it did was to ban crypto transactions from the regulated banking system.
So in this case, crypto platforms could no longer use the regulated financial system (bank accounts) to facilitate the delivery of crypto based goods to Nigerians.
Arising from this, crypto exchanges also braced up and made appropriate adjustments in terms of how they connect buyers and sellers.
Two of such ways are peer to peer lending and Naira P2P. Peer to peer trading simply means the place of individual transactions without an intermediary or third party while Naira P2P simply is a situation where someone just transfers the naira equivalent to buyers account. While this had existed alongside the use of exchanges right from time, the use of exchanges was however favoured more because of the trust element assured.
Enter Zuga Coin
It is on the back of this that a Nigerian Bishop, Archbishop Sam Zuga launched his own coin, Zuga coin late 2021. No doubt anyone entering the cryptocurrency world as a player at this time knows exactly how turbulent it is going to be for him or her.
The currency was launched late 2020 and information has it that March 3 it announced a ground breaking history which was its first withdrawal into a fiat currency.
In celebrating the milestone, the Archbishop was quoted as saying, “Let it be on record all over the world that ZUGACOIN was first Cashed out/ withdrawn/ changed into Fiat currency on 3rd March 2021 by 13 minutes after 11 Antemeridiam (a.m) Nigerian time against all odds. When God says YES nobody can say no. With God all things are possible. All things are possible to him that believes,” the philanthropic Cleric also known as Jehovah’s Field Marshall announced.
With the feat, Zugacoin could now be withdrawn into any fiat currency of choice without hitches. But just as examined above, the road ahead for the coin sure has its bumps and man-holes.
On Saturday 13th March, news went round that a partnership deal had been struck with indigenous auto-maker, Innoson Motors. With the alleged partnership, it was said that holders of the coin could now be used to make payment for vehicles and other equipments from Innoson.
The partnership was seen as a good idea by many watchers as many perceived it to be an attempt to increase sales of its vehicles from Innoson’s end while this increased Zuga coin’s acceptability and popularity.
But that was short-lived as Innoson Motors issued a statement days later that it had entered into no such partnership agreement with any organisation.
What happened many wondered? Could it be that Innoson motors was trying to save its face, and possibly its relationship with Nigeria’s financial regulator, the CBN after realizing that the news had gone viral? Or was the miss-information from the Archbishop’s end?
That we probably will get to know in the days and possibly weeks to come but it does reveal one thing; that Nigeria still has a long way before cryptocurrency gets accepted both by the people and the country’s financial regulators who do not want to touch it even with a long stick majorly because it has no power to regulate its processes.
But then again, the milestones and possibilities of cryptocurrency and especially a home-grown solution like Zugacoin nay other indigenous coins springing up cannot be overlooked. The ease with which cross-border transactions are carried out, creation of job employment opportunities and a host of other benefits cannot be overlooked.
As at the time of drafting this piece, Zugacoin’s market capitalization stood at $71,333,568 with a trading volume of $152,419 and this is forecasted to grow in the coming months. This is huge when seen in the context of the period it has been in existence.
It is time policies are made that encourage innovation and increase job creation prospects for the nation’s teeming unemployed youths by the country’s premier financial regulator.
