On February 5th 2021, the Central Financial institution of Nigeria (CBN) issued a letter to monetary establishments within the nation implementing the closure of accounts dealing in cryptocurrency transactions.
Following this, industrial banks deactivated the accounts of people partaking in such exchanges. Cryptocurrency platforms corresponding to Luno additionally launched statements disabling all Naira withdrawals and deposits.
This resulted in widespread concern each nationally and internationally concerning the influence it may have on the rising FinTech industry in Nigeria. Specifically, there’s fear that the trade might lose out on investments from future-focused tech firms who endorse cryptocurrency use.
In response to those considerations, the CBN revealed a press release justifying its place and emphasizing the inherent dangers related to cryptocurrencies. It maintained that these actions are “not in any approach, form or type inimical to the event of FinTech or a technology-driven cost system.”
Nigeria traded 60,215 bitcoins, valued at greater than $566 million on Paxful, a world peer-to-peer bitcoin market, within the final 5 years
Most significantly, they clarified that the latter didn’t place any new restrictions on cryptocurrencies referencing a CBN round dated January 12, 2017. This round prohibits banks within the nation from utilizing, holding, buying and selling and transacting in cryptocurrencies.
Based on a Quartz report, Nigeria traded 60,215 bitcoins, valued at greater than $566 million on Paxful, a world peer-to-peer bitcoin market, within the final 5 years. This makes it the second largest quantity worldwide, after america on the crypto platform.
This isn’t notably surprising given the nation’s massive youth inhabitants, development in know-how, excessive inflation charges and risky native forex.
Contemplating these figures and the truth that cryptocurrencies have been nonetheless traded via monetary establishments following the round in 2017, it’s value asking why it took 4 years for the ban to be enforced.
Many high-profile cases introduced by the Financial and Monetary Crimes Fee (EFCC) haven’t concerned cryptocurrencies
In justifying their place within the press launch, the CBN made reference to different nations that beforehand positioned limitations on monetary establishments facilitating using cryptocurrencies. Its major motive for implementing the ban was the largely speculative and nameless nature of cryptocurrencies which inspires its use for cash laundering, terrorism financing and different legal actions.
Though a legitimate level, this motive is well relevant to authorized tender. Many high-profile cases introduced by the Financial and Monetary Crimes Fee (EFCC) haven’t concerned cryptocurrencies.
As well as, the CBN’s motion has gotten extra individuals thinking about studying about cryptocurrencies. Additionally it is unclear whether or not the letter issued pertains to personal people buying and selling on cryptocurrency platforms. This may increasingly expose new traders to scams as they commerce via unmonitored peer-to-peer platforms which contradicts the CBN’s intentions and makes it tougher to regulate.
It’s debatable that the CBN may have taken a extra innovative-friendly strategy contemplating the native and international funding within the firms that present such companies to the Nigerian inhabitants.
One other concern raised was that small retail and unsophisticated traders may face big losses resulting from their extremely risky nature. That is comprehensible given their restricted nature which renders it prone to market manipulation and speculative demand.
Bitcoin additionally performed a serious position within the #EndSARS protests towards police brutality
For instance, Elon Musk’s current endorsement of Bitcoin noticed it soar in worth to $44,200. The cryptocurrency has additionally lately seen a surge in worth of over $50,000.
Bitcoin additionally performed a serious position within the #EndSARS protests towards police brutality when non-profit group Feminist Coalition had their preliminary cost platforms for voluntary donations blocked. For that reason, a number of Nigerian youth have linked this enforcement to retaliation from the Nigerian authorities.
Through the protests, over $80,000 was contributed in Bitcoin which was used amongst different issues, to supply medical help for these injured in the course of the protests and authorized help for wrongfully arrested residents. This can be a clear instance of how the youthful inhabitants used cryptocurrency to navigate a restrictive banking system.
We’re transferring to solely accepting donations in Bitcoin utilizing BTC Pay. BTC Pay is a free, safe, decentralized and censorship-resistant platform, which makes it our greatest possibility, given the previous few days #EndPoliceBrutalityinNigeria
Please donate right here: https://t.co/FvsEKetUL9
— feministcoalition (@feminist_co) October 15, 2020
I had a brief dialog with Fikemi Aiyepeku, an Worldwide Enterprise and French scholar within the US and long-time good friend of mine, who was current on the #EndSARS protests final 12 months.
Though not initially linking the CBN’s announcement to the protests, she thought-about it suspicious the way it solely took now to take action.
For her, the protests have been a unifying expertise. There was a sense of desperation and frustration from Nigerian residents, however there was additionally a lot hope.
Sadly, much like the enforcement of this cryptocurrency ban, it has ended with extra concern from Nigeria’s youthful inhabitants.
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