Nigeria Deposit Insurance Corporation Warns About Cryptocurrency Use


While Nigeria Deposit Insurance Corporation warns about cryptocurrency use, an executive at the Research Department at the NDIC, Adikwu Igoche, has noted that cryptocurrencies were not authorized by the CBN. Therefore, they are not “insured by the NDIC.”

26 March, AtoZForex Nigeria Deposit Insurance Corporation (NDIC) has warned Nigerian citizens against the use of cryptocurrencies. The authority has cautioned the public due to the fact that Central Bank of Nigeria (CBN) does not recognize digital currencies as a legitimate currency.

Nigeria Deposit Insurance Corporation Warns About Cryptocurrency Use

According to the local news reports, this warning does not appear as the first one for Nigerians against cryptocurrency market. The media outlet notes that “various government agencies in Nigeria have cautioned citizens on the new form of money.”

An executive at the Research Department at the NDIC, Adikwu Igoche, has stated that cryptocurrencies were not authorized by the CBN. Therefore, they are not “insured by the NDIC.”

In the course of his interview with one of the local media agencies, Adikwu Igoche has stated that since cryptocurrencies are “not backed by any physical commodity, such as gold or precious stone, they do not belong in the category of currencies or coins issued by the CNB or the central bank of any other country.”

Following on this, Adikwu Igoche also has highlighted that Nigerian citizens should only trust financial institutions that are “insured by NDIC.”  This is denoted by a sticker in their physical locations. He has added that the NDIC had a stand at the fair to aid Nigerians with issues related to their banks.

Global Regulators Express Concerns

As of the moment, almost all of the countries all over the world have issued warnings in regards to the cryptocurrency market. The authorities have been cautioning the investors’ community about investing in cryptocurrencies and Initial Coin Offerings (ICO).

Some of the latest warnings include the European Supervisory Authorities (ESAs) for securities (ESMA), banking (EBA) and insurance and pensions (EIOPA). The group has warned customers in regards to the risks of buying cryptocurrencies earlier this February.

The official announcement on the website of ESMA states:

“The ESAs are concerned that an increasing number of consumers are buying VCs unaware of the risks involved. VCs such as Bitcoin, are subject to extreme price volatility and have shown clear signs of a pricing bubble and consumers buying VCs should be aware that there is a high risk that they will lose a large amount, or even all, of the money invested.”

The authorities further add that virtual currencies and cryptocurrency exchanges are not regulated under the EU law.

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