Foreign Affairs minister, BDAN Chairman urge cryptocurrency taxation to boost Nigeria’s revenue

Prominent voices in Nigeria’s economic and policy space have renewed calls for the taxation of cryptocurrencies, underlining the need for comprehensive regulatory frameworks to manage the rise of digital assets. Nigeria’s Minister of Foreign Affairs, Ambassador Yusuf M. Tuggar, and the Chairman of the Bank Directors Association of Nigeria (BDAN), Mr. Mustapha Chike-Obi, made separate appeals for regulation, with an emphasis on harnessing potential revenue while safeguarding the financial system.

Ambassador Tuggar made his position known during a Private Sector Roundtable event that preceded the West Africa Economic Summit (WAES) in Lagos. He called on private sector players to take the lead in developing models for regulating and taxing cryptocurrencies, which could then be presented to the Central Bank of Nigeria (CBN) for adoption.

We need the private sector to be part of the solution. Let’s design a system we can sell to the Central Bank — one that can help us generate revenue for Nigeria,” Tuggar stated. “Crypto is not going to disappear. It may not exist in its current form forever, but digital transactions will certainly persist.”

He pointed to global developments, such as growing calls in the United States to impose tariffs on remittances, as evidence that countries are actively exploring ways to benefit from the financial shifts brought about by digital currencies. “We must be innovative with blockchain and ensure it is used in a way that strengthens, rather than weakens, our economy. Enhancing digital security is also essential,” he added.

In a related development, Mr. Mustapha Chike-Obi, speaking in an interview with WebTV monitored in Lagos, delved into the technical and philosophical foundations of cryptocurrency. He emphasized the need for Nigerian policymakers to fully understand how cryptocurrencies function before attempting to regulate or tax them.

“Cryptocurrencies were designed to bypass centralized ledgers — the very foundation of how banks and governments monitor financial transactions,” Chike-Obi explained. “In a traditional banking system, every transaction is logged on a centralized ledger that regulators can inspect. Crypto, however, operates on a decentralized system where ownership is hidden and verification is complex.”

He described the blockchain process as one in which transactions are verified through a series of computational tasks involving public and private keys. These tasks require massive computing power and are what make cryptocurrency transactions secure, but also difficult to trace and regulate.

Chike-Obi argued that while cryptocurrencies may appear valuable now, they are unlikely to become mainstream due to their inefficiencies at scale. “Crypto thrives when it makes up 10 to 20 percent of financial transactions. But if it becomes dominant — say 50 percent or more — it becomes unsustainable because verifying each transaction would take far too long,” he said.

He was skeptical of claims that cryptocurrencies could replace traditional fiat currencies like the Naira or the US Dollar. “Cryptocurrency is not a currency in the true sense. It’s simply a decentralized ledger system. It has value due to its computational cost — what we refer to as mining — but it’s not viable as a universal medium of exchange.”

Despite his reservations, Chike-Obi said Nigeria should not ignore crypto space. “If I were advising the government, I would say: study it, monitor it, regulate it, and most importantly, find a way to tax it,” he advised. “We must strike a balance between embracing innovation and protecting our economy.”

The growing consensus among economic leaders suggests that while Nigeria may not be ready to fully integrate cryptocurrencies into its financial system, it cannot afford to overlook their impact. Calls for taxation and regulation point to a broader need for government policy to catch up with rapidly evolving financial technologies.

Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (Syndigate.info).