Virtual currencies expanded all over the world and in many different countries. This is why there are some authorities and governments that are starting to pay attention to it. Nigerian authorities, for example, are worried about cryptocurrencies work and their disintermediation.
The director and the chief executive of the Nigeria Deposit Insurance Corporation (NDIC), informed that they are closely following cryptos and how they work since they are concerned about their features.
Several digital assets in the market are decentralized and they have no intermediaries to process transactions. This is why authorities are becoming increasingly worried. Governments and banking institutions are not able to control the flow of funds from one country to another and have information about the transactions being processed by the network.
The disintermediation is another important and major characteristic of virtual currencies. Customers do not need to go through established traditional institutions to purchase virtual currencies. Users can purchase cryptocurrencies from other people, exchange platforms or even ATMs.
According to the Nigerian news outlet The Sun, Ibrahim Umaru, talked about disintermediation and fintech technology. He said that these features are a critical concern for them.
About it, Mr. Umaru mentioned:
“The partial disintermediation of the banking system arising from proliferation of digital currencies such as Bitcoin, as well as the activities of fintech are all of critical concern to the corporation.”
The NDIC is an institution that was established back in 1988. The main intention behind it is to ensure safety in the banking sector. At the same time, the agency has a supervisory role over a few banks in the market.
Nigeria has always been taking different measures to avoid its citizens being involved in the cryptocurrency market. The Central Bank informed that virtual currencies are not authorized by it and that are not insured. Furthermore, the NDIC warned Nigerians about the risks of using virtual currencies.
There are different governments that are not so friendly towards cryptocurrencies. In China, for example, Bitcoin, Initial Coin Offerings (ICOs) and other virtual currencies have been banned from the country.
Nevertheless, there are several Nigerian companies that are working with blockchain technology and are having a good performance in the African continent.
Although there is a very active virtual currency community in Nigeria, there are some individuals that believe that virtual currencies are Ponzi schemes or MLM.
South Africa, for example, is also one of the most active countries in the continent in terms of cryptocurrencies and blockchain technology.