The Central Bank of Nigeria (CBN) has prohibited the use of cryptocurrencies within the country warning members of the public of the risks associated with transactions in virtual currencies.
In a circular dated February 5, 2021, the CBN further directed Banks and other financial institutions to identify persons and entities transacting in cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.
This is not the first time the CBN is warning Nigerians about cryptocurrencies. In a statement on February 28, 2018, signed by its Acting Director in charge of Corporate Communications, Mr. Isaac Okorafor, the apex bank reiterated that cryptocurrencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and Exchanges such as NairaEx were not licensed or regulated by the CBN.
According to data released last year by the Bitcoin exchange site Paxful, Nigeria is the second-largest bitcoin market after the United States on its platform.
Bitcoin trade had its highest spike of 30% in 2020 during the national lockdown in the country and the highest volume traded during the peak of the pandemic. Between January and September, Paxful reported a 137% increase in new registrations in Nigeria.
Bitcoin is the most popular cryptocurrency in Nigeria, and in the last five years, Nigerians had traded 60,215 bitcoins, valued at more than $566 million.
All of these are what the CBN is seeking to halt, but Nigerians are not taking the news lying down. “CBN is fighting a lost battle. Others are thinking hard on how to embrace and incorporate the inevitable into everyday life. We shall see who wins!” a concerned Nigerian Tweeted.
Federal government and CBN wants to ban crypto simply because they don’t know how they can control it or benefit from it.
— valking ♔ 🇦🇷 (@_VALKlNG) February 5, 2021