Stakeholders at the yearly Punuka Lecture, which held on Victoria Island, Lagos agreed that there is a need for laws that will strengthen the operations of fintechs. Joseph Eshanokpe and Robert Egbe report
As Nigeria making steady progress in the electronic financial market? Yes, say experts.
An Associate Professor at Law and Entrepreneurship Clinic at the University of Wisconsin, United States, Charles Von Simson also agrees. Simson, who was the guest speaker at the Punuka Annual Lecture, last Thursday on Victoria Island, Lagos, noted that stable coins are digital access designed to maintain a stable value relative to a national currency or other reference asset.
At the event themed Fintech, crypto and frontier technologies in trade; prospects and legal challenges, Simson warned that stable coin users were at the risk of financial and systemic loss because of the power of the currency.
He said the Fintech crypto currency had many laws guiding its operation across the world and, indeed Nigeria, which has made remarkable progress in this area, and requires a strong crypto law that would protect the emerging market.
In his keynote address, Minister of State for Budget and National Planning Prince Clem Agba praised Punuka Attorneys and Solicitors for choosing such a topic because of its relevance to the nation, particularly with the recent launch of the eNaira.
Agba, who was the guest of honour at the event, said with all the measures put in place by the Federal Government, especially with the repositioning of the budget calendar back to January to December, which culminated in the recent unveiling of the national development plan, the nation’s economy was on its way to a strong revival as millions of jobs would be created over the next five years with the Fintech and crypto currencies playing a big role.
Convener of the event and senior partner at Punuka Attorneys and Solicitors Chief Anthony Idigbe (SAN) said technology has affected nations’ economies, including Nigeria, and that there was, therefore, the need for proper regulation for the Fintech, crypto market on one hand and protection of Nigerians on the other.
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He stressed the need for players in the field to not only understand what they were getting into but to also cover themselves legally to navigate the various risks in the subsector.
In her welcome address, the Managing Partner of Punuka, Mrs. Elizabeth Idigbe, said traditional banks had seen a great change since the introduction of technology into banking, with many banks having their mobile and saving applications, while digital payments have increased by more than five times since its introduction.
Mrs.. Idigbe said: “Traditional banks have seen a drastic change since the introduction of technology into its operations and service offerings. Many banks today have their own mobile and saving applications, virtual assistants etc which have helped customers have easy access to their monies and consequently catalysed the flow of business1. Digital payments in Nigeria have surged more than five folds since 2014, reaching N150 trillion ($256 billion) as at 2019. In 2020, e-wallet held about 10 per cent of digital payments in Nigeria with the most common service being KongaPay, which accounted for four percent of the payments, while PayPal followed with three per cent. Overall, cash and bank transfers were the second most common payment methods in online retail after cards.
“From a survey of about 290 start-ups conducted by Fintech Association of Nigeria (FintechNGR), there are about 165 Fintech start-ups in Nigeria. Fifty-seven of Fintech start-ups reportedly generate a yearly revenue of over $5 million. Some Fintech companies on the forefront are Paystack, Flutter wave, Paga, and Piggyvest. As the global economy turns away from reliance on natural resources and toward innovation in service delivery, privately held Financial Technology (Fintech) companies such as Opay, Interswitch, and Flutterwave are becoming increasingly valued. These ‘unicorns,’ with valuations exceeding a billion dollars, make the countries where they are based attractive locations for foreign investment. There are five unicorns in Africa, with four of which are based in Nigeria.
“While there is a certain familiarity regarding Fintech, I am sure I may be speaking the mind of many in the audience that the same cannot be said for concepts such as Cryptocurrency and Blockchain, notwithstanding that they are not new. Fintechs in Nigeria are met with a rocky regulatory outlook. The report of the Fintech Roadmap Committee highlights several regulatory overlaps existing as a result of a plurality of regulatory authorities having oversight of different segments of the financial sector.”
This was the 13th Punuka Annual lecture but the first to be held with online viewers.
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