Lagos, Feb. 23, 2021 – An Economist, Mr Tope Fasua, has said that 60 per cent of Central Banks across the globe were under pressure to issue sovereign digital currency.
He said this followed the sudden rise in value, acceptability of Crypto-currencies and investors search for alternative places to put their money,
Fasua, who is the Chief Executive Officer, Global Analytics Consulting Ltd, made the disclosure at the February edition of the Finance Correspondents Association of Nigeria (FICAN) monthly forum, on Tuesday, in Lagos.
According to him, although no banker to the government will support Crypto-currency, they had no option than to begin to issue their own Central Bank Digital Currency (CBDCs).
“About five countries – China, Ecuador, Senegal, Tunisia and Singapore – have issued digital currencies, not Crypto-currency, and bankers know that they are done for, if crypto-currencies really take off and replaces traditional currencies,” he said.
Fasua specifically said that quite a number of bankers had invested in cryptos just to hedge their bets, but the traditional financial system had remained deeply rooted, organized and backed by government, unlike the Crypto-currency mining space.
The News Agency of Nigeria (NAN) reports that the Central Bank Governor, Mr Godwin Emefiele, on Tuesday honoured the invitation of the Senate over the ban CBN placed on crypto-currency-related accounts in the country.
Emefiele was summoned by the Senate Joint Committee on Banking Insurance and other financial institutions.
However, speaking on the topic: “Ban on Crypto-currency-related accounts in Nigeria and concerns of global central banking,” Fasua said that the proponents of the crypto-currency believed that there was a need to push back and do something different.
Fasua noted that cryptos had become something that will mimic the attributes of a gold-backed currency in view of durability and scarcity, but better than the current system by being smart, secure and not possible for central banks to issue at will.
He said: “If it started as a rebellion (which is the case), then you must think of the incentive for the global economy to sign on to that rebellion with you, against the devil they know.
“This then means that until there is global acceptance of the currencies, it will continue to be easy to create panic in the crypto world and big players can dump the currency when they have achieved gains.
“It then becomes worse than the stock market, because, for crypto-currencies, the fundamentals are non-existent apart from an analysis of how many are adopting the currency and who is winning between an established traditional banking system and the new kids on the block”.
Fasua said that Crypto-currency was heading to global single currency. saying that one major challenge is that there is a lot of loses in it and that when most coiners die, no one is able to access their investments which ab initio were encrypted with passwords, passphrases and whatnot.
“People don’t usually plan to die. Now, this is where regulation helps in the financial markets. Apart from deposit insurance, which kicks in, in the event of the collapse of an insured and regulated financial institution, the relations of a dead account holder in a traditional bank could still have access to their balances,” Fasua stated.