The Nigeria Deposit Insurance Corporation (NDIC), a federal insurance overseer and safety net provider, has issued a public warning about relying on cryptocurrency transactions in a press release on July 25.

According to the press release, managing director and CEO of NDIC Umaru Ibrahim said that relying on cryptocurrencies is very risky, because they are unregulated and unbacked by central banks in most financial jurisdictions.

Much like the United States’s Federal Deposit Insurance Corporation, the NDIC provides a safety net for depositors and aims to protect the banking system from instability caused by bank runs or loss of confidence.

House speaker notes need for crypto regulation

Ibrahim initially voiced his concerns during a courtesy call with the NDIC board and the Speaker of the House of Representatives, according to a report by the news outlet Ripple Nigeria on July 25.

Speaker Femi Gbajabiamila, voiced an eagerness to regulate cryptocurrencies and partake in the emerging global crypto market, saying:

“The NDIC and other safety-net participants in the country must not be left behind in the adoption of appropriate regulatory framework to deal with the prevalence of cryptocurrencies in the global financial space.”

As previously reported by Cointelegraph, Gbajabiamila also discussed the difference between the NDIC and the Central Bank of Nigeria. The speaker said that the House of Representatives would assist NDIC in growing its statutory functions, without infringing upon the central bank’s domain of responsibilities.