Nigerian Central Bank Governor Says Fintechs and Cryptos Change the Way Financial Systems Function

The Nigerian central bank governor and bitcoin critic, Godwin Emefiele, recently remarked that the rise of fintechs and cryptocurrencies among other technologies have forced banks and financial institutions to change the way they operate. According to Emefiele, this requires the central bank’s monetary policy committee (MPC) to rethink the way it regulates the financial system.

Rethinking Financial System Regulation

The governor of the Central Bank of Nigeria (CBN) Godwin Emefiele, reportedly said the MPC, which was set to meet on July 18 and 19, must chart a new path that changes the direction of Nigeria’s monetary policy.

Speaking at a so-called MPC retreat, Emefiele said new technologies and innovations were playing an important role in the development of Nigeria therefore the MPC’s decisions going forward must seek to enhance the contributions of these technologies.

Further, in his remarks published by Daily Nigerian, Emefiele — a bitcoin critic — argued that fintechs and cryptos have changed the way the financial system functions and this calls for a rethink. He said:

The evolution of fintechs, cryptocurrencies, digital payments, artificial intelligence and machine learning, have changed the functioning of the financial and banking sectors, both globally and domestically. Therefore, the urgent call for the need to rethink financial system regulation, supervision and monetary policy implementation.

Although new technologies and innovations are often associated with risks and uncertainties, Emefiele insisted that these also come with several benefits that include better access to financial services, poverty reduction, and employment creation.

Staying Relevant in a Changing World

Meanwhile, the Daily Nigerian report also quotes the CBN governor urging members of MPC to acquaint themselves with monetary policy tools and objectives that are relevant to a digitized world.

“In order to ensure the relevance of monetary policy and the role of monetary authorities in the new digital world, MPC members must embrace themselves with [an] advanced level understanding of the interplay of digitalization with monetary policy objectives, targets and tools,” Emefiele reportedly said.

Concerning the MPC retreat, Emefiele said this was an important event because it gives the central bank an opportunity to assess its performance in the last three to four years.