Osinbajo: Why does CBN need to adopt blockchain technology

Osinbajo: Why does CBN need to adopt blockchain technology

Vice President Yemi Osinbajo says Nigeria may need to expand its banking licenses in order to accommodate more players in the brokerage value chain.

Osinbajo said this on Monday during his keynote address at the third edition of the Nigerian Digital Economy Summit (NDES) in Abuja.

Speaking on the topic “Web 3.0, Blockchain and DeFi: Impact of Africa’s Digital Economy”, Osinbajo urged central banks around the world to adopt blockchain technology.

He said that blockchain technology, which allows digital information and transaction records to be securely stored and distributed, could disrupt central banks globally if not assimilated into the system.

In 2021, the Central Bank of Nigeria (CBN) issued Directing banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

“From a policy perspective here in Nigeria, we may once again need to expand the range of banking licenses available to enable more players in the brokerage value chain,” Osinbajo said.

“Even central banks around the world will have to rethink their roles as blockchain will challenge the centralization of monetary authority with its obvious flaws.

“Who do you know? We may actually be in the last days of the central banking system as we know it.

“Either central banking systems around the world will adopt blockchain technology, or they will be taken over by blockchain technology.

“We are definitely, in my opinion, the last central banking system. Which means that the space is open to all kinds of innovation in central banking.”

Osinbajo also said that clear rules should be established to support crypto markets and trading in other digital assets.

He said it was clear that the same old banking licenses that were in use were no longer viable.

“In the past, there was only one type of banking license that cost N25 billion in the past few years. These are excellent policy changes that have taken place with a lot of pressure from young men and women in technology and entertainment,” he added.

“The CBN has been modified and there are different types of banking licenses which is why we have fintech companies, unicorns because they use different cadres of CBN licensing that don’t require a capital of N25 billion.

“So, for example, Kuda and many others have a different type of license. Flutterwave and Paystack are in some form of banking or the other.

“With the new iteration, with Web 3, we have to rethink and create other types of licenses that are much cheaper so that more participants can access this space.”

Also speaking at the event, Lanri Osibona, Founder and CEO of Foresight Group, said that digital transformation has been a huge force for change in Nigeria.

Osibona said a concerted effort is needed to drive digital transformation in Nigeria.

“Collectively, we must start addressing strategic actions that will support Africa’s technological transformation as well as Nigeria’s technology ecosystem and digital economy,” he said.

Innovation to transform sectors including banking, finance, health, education, agriculture, hospitality, urban and industrial development is critical.

“Blockchain technology for agriculture is gaining momentum especially now for the tracking, access, market and close monitoring of critical issues that have been identified in the food value chain of the agricultural sector from production to final production.”

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