CBN ban on Cryptocurrencies trading in Nigeria

Cryptocurrencies ban in Nigeria

In a recent five page letter published by the Central Bank of Nigeria (CBN), the apex bank of the country placed a ban on the buying and selling of Bitcoin and other cryptocurrencies in the country.

The apex bank’s circular read in part:

“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.”

CBN threatened to sanction any bank, financial institution(s) that goes against its directive.

With Nigeria becoming the second largest country with volume of Bitcoin trading in the world after US on Paxful, and number eight in cryptocurrencies trading volume in the world according to chainalysis, it seems the citizens of the country are seeing the potential of a digitalized world.

The world is transitioning into a digital era with countries like USA, China and many more creating Central Bank Digital Currencies (CBDC).

The question arises,

Is the ban on cryptocurrencies a safe haven for Nigerians?
Is the ban on cryptocurrencies a display of mediocrity on the government of Nigeria?
Is the ban on cryptocurrencies a payback for the endsars protest?
Is the ban really a means of checkmating the citizens?
Is Nigeria in a state of retrogression?

It would be noted that after the freezing of bank accounts of some individuals during the endsars protest that took place in 2020, Nigerians resorted to cryptocurrencies as a means to fund the endsars protest/movement.

It is important to clarify that the CBN circular of February 5, 2021 did not place any new restrictions on cryptocurrencies, given that all banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, not to use, hold, trade and/or transact in cryptocurrencies,” the statement said

It also states that cryptocurrencies are issued by “unregulated and unlicensed” entities, and that crypto assets are volatile speculative assets that can be a danger to Nigerian users. 

Due to the fact that cryptocurrencies are largely speculative, anonymous and untraceable they are increasingly being used for money laundering, terrorism financing and other criminal activities,” the statement said

What a show of profound care and protection from the Nigerian government. Where would the Nation be if all issues are tackled with such utmost care and urgency?

The CBN letter is signed by Bello Hassan, Director of Banking Supervision, and dated Feb. 5.

This did come with diverse reactions from Nigerians on twitter, below is a post from a twitter user,

CBN just placed a ban on Cryptocurrency, this is a sign of an unprogressive mentality. I look forward to the day I would ‘japa’ from the country. The country doesn’t have any plan for me as a youth, so I must be smart, and plan for myself.”

Another Nigerian twitter user says,
Cryptocurrency can’t be banned for crying out loud. This stuff is way bigger than CBN. The more we try to ban crypto the more the blockchain, technology becomes smarter in the place of decentralization. They are so many payment interfaces to exchange my bitcoin and crypto.

In a recent interview with Adamu Garba to discus CBN’s cryptocurrency ban he said, ‘cryptocurrency causes unemployment and other bad things in Nigeria”.

In a world where top business moguls like Elon Musk, Music Legend Snoop Dogg and other influential persons in the world are advocating the use of cryptocurrencies, Nigeria is placing a ban on the trade of Bitcoin and other cryptocurrencies.

Can the Central Bank of Nigeria really ban cryptocurrencies and it’s use in Nigeria? I think we would wait to see where this dance leads to.

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