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IMF backs CBN on cryptocurrency ban

The International Monetary Fund (IMF) has backed the decision of the Central Bank of Nigeria to ban cryptocurrency.

IMF confirmed that some crypto currencies were being used for money laundering and drug trafficking.

The agency’s Resident Representative for Nigeria, Ari Aisen, made this known on Wednesday during a virtual briefing on the recently published 2020 Article IV IMF Staff Report for Nigeria.

However, the IMF cautioned the Federal Government (FG) against increasing the tax rate in a bid to generate more revenue, saying this is not the right time for such moves.

According to Aisen, many central banks around the world, have taken similar policy decisions as the CBN.

He said, “The issue with some of the cryptocurrencies is that perhaps some care should be taken about their activities. The use of cryptocurrencies is a concern.  That is why some central banks, not only in Nigeria have these concerns about what kind of the activities these crypto currencies are put and how best to monitor those activities.

“Some of them may be illegal activities and may be related to money laundering, even drugs or other illegal things.  It is natural that the monetary authorities will be concerned about how best to supervise and increase their oversight regarding the use of crypto currencies.

“The CBN is thinking closely about its trade-offs and is trying to design the best policy in the interest of the payment system and the sustainability of the financial sector.”

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