Regulation
IMF Speaks Out on Regulation of Global Crypto Platforms in Nigeria
THE International Monetary Fund (IMF) has advised the Nigerian government to implement regulations on global cryptocurrency trading platforms in the country.
The IMF suggested that platforms be registered or licensed in the country.
The Fund made the recommendation in its latest staff report, released on Thursday, following the conclusion of its 2024 Article IV consultation with Nigeria.
Earlier in February, the Nigerian government shut down the operations of Binance and other crypto-asset trading platforms.
According to the IMF, these platforms should adhere to the same regulatory standards as those applied to traditional financial intermediaries, based on the principle of “same activity, same risk and same regulation”.
Highlighting the importance of anti-money laundering and counter-terrorist financing (AML/CFT) measures, the IMF stressed the need for effective supervision to ensure compliance between crypto trading platforms and other providers virtual asset services.
“Staff recommends that global crypto trading platforms be registered or licensed in Nigeria and subject to the same regulatory requirements applicable to financial intermediaries on a same business, same risk and same regulation basis. Furthermore, authorities should ensure the application of AML/CFT preventive controls by crypto trading platforms and other virtual asset service providers through effective risk-based AML/CFT supervision,” it says. The report.
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The IMF encouraged the CBN to develop an explicit and transparent foreign exchange intervention strategy, which defines a volatility measure and threshold that would trigger intervention.
The global body also recommended that interventions be carried out through an auction mechanism at market-based rates, with announcement of intervention amounts and rates.
“Such interventions should be symmetrical and temporary, which would also help preserve reserves. Interventions should not be used as a substitute for macroeconomic policy adjustment needed to restore internal and external stability,” he said.
READ ALSO : Nigerian Lawmakers Concerned Over Crackdown on Cryptocurrency Platforms, Launch Investigation
The IMF has expressed concern over the potential impact of legislative amendments to the Central Bank of Nigeria (CBN) Act, saying certain provisions of the current bill, such as the establishment of a “Committee of coordination of monetary and fiscal policies” chaired by the Minister of Finance, could weaken the autonomy and governance of the central bank.
“Several elements of the current bill, as disclosed in the public domain, would, if adopted, significantly weaken the institutional framework and its independence. For example, the envisaged “Monetary and Fiscal Policy Coordination Committee”, chaired by the Minister of Finance, could undermine the autonomy of the CBN and its Monetary Policy Committee, chaired separately by the CBN Governor. The Bill also does not include the recommendations of the Safeguards Assessment,” the report said.
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