IMF Supports CBN’s Move on Cryptocurrency Ban

The International Monetary Fund (IMF) has thrown its weight behind the Central Bank of Nigeria (CBN) in the latter’s decision directing banks to desist from transacting in/and with entities dealing in cryptocurrencies.

The IMF Resident Representative for Nigeria, Mr Ari Aisen, during a special virtual press briefing on the recently published 2020 Article IV IMF Staff Report for Nigeria, said that the use of cryptocurrencies for illegal transactions such as money laundering and drugs was a global concern.

According to him, many central banks in the world, have taken similar policy decisions such as taken by the CBN.

He explained that the issue with cryptocurrencies is that perhaps some care should be taken about their activities and the use of cryptocurrencies.

Therefore, it is natural that the authorities would be extremely concerned about how best to supervise and improve the use of cryptocurrencies.

The Resident Rep said that Nigeria’s Debt/GDP ratio has not reached a level of overt concern, but added, it was important to ensure that debt/GDP was not allowed to reach a level that would make it unsustainable.

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He added that it was important to manage borrowed funds properly for the economic benefits of the nation.

Mr Aisen added, “What is most important to be monitored is the ratio of debt service to revenue, noting that the nation’s revenue profile was very low and therefore not enough to meet budgetary expenditure provisions.

“If there is one policy that has to be a top policy priority it is how to raise revenue,” the Rep admonished.

He said, however, “this is not the right time to raise tax rate,” as according to him, the government should rather strengthen its tax administration by expanding the tax base and block leakages.