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Chidiebere Okoroafor
On February 5th 2021, the Central Financial institution of Nigeria (CBN) issued a letter to monetary establishments within the nation imposing the closure of accounts dealing in cryptocurrency transactions.
Following this, business banks deactivated the accounts of people participating in such exchanges. Cryptocurrency platforms comparable to Luno additionally launched statements disabling all Naira withdrawals and deposits.
This resulted in widespread concern each nationally and internationally concerning the affect it may have on the rising FinTech industry in Nigeria. Particularly, there may be fear that the business 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 fee system.”
Nigeria traded 60,215 bitcoins, valued at greater than $566 million on Paxful, a worldwide 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.
In keeping with a Quartz report, Nigeria traded 60,215 bitcoins, valued at greater than $566 million on Paxful, a worldwide peer-to-peer bitcoin market, within the final 5 years. This makes it the second largest quantity worldwide, after the USA on the crypto platform.
This isn’t significantly surprising given the nation’s massive youth inhabitants, progress in expertise, excessive inflation charges and unstable native foreign money.
Contemplating these figures and the truth that cryptocurrencies had been nonetheless traded by means of 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 international locations that beforehand positioned limitations on monetary establishments facilitating using cryptocurrencies. Its major purpose for imposing 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 sound level, this purpose is definitely 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 taken with studying about cryptocurrencies. It is usually unclear whether or not the letter issued pertains to non-public people buying and selling on cryptocurrency platforms. This will likely expose new traders to scams as they commerce by means of unmonitored peer-to-peer platforms which contradicts the CBN’s intentions and makes it harder to manage.
It’s debatable that the CBN may have taken a extra innovative-friendly method contemplating the native and overseas 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 large losses attributable to their extremely unstable nature. That is comprehensible given their restricted nature which renders it prone to market manipulation and speculative demand.
Bitcoin additionally performed a significant position within the #EndSARS protests in opposition to police brutality
For instance, Elon Musk’s current endorsement of Bitcoin noticed it leap in value to $44,200. The cryptocurrency has additionally not too long ago seen a surge in value of over $50,000.
Bitcoin additionally performed a significant position within the #EndSARS protests in opposition to police brutality when non-profit group Feminist Coalition had their preliminary fee platforms for voluntary donations blocked. Because of this, a number of Nigerian youth have linked this enforcement to retaliation from the Nigerian authorities.
In the course of the protests, over $80,000 was contributed in Bitcoin which was used amongst different issues, to offer medical assist for these injured throughout the protests and authorized support for wrongfully arrested residents. It is 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 choice, 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 pupil within the US and long-time good friend of mine, who was current on the #EndSARS protests final yr.
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 had been a unifying expertise. There was a sense of desperation and frustration from Nigerian residents, however there was additionally a lot hope.
Sadly, just like the enforcement of this cryptocurrency ban, it has ended with extra concern from Nigeria’s youthful inhabitants.
Chidiebere Okoroafor
Featured picture courtesy of Nick Chong through Unsplash. Picture license discovered here. No modifications had been made to this picture.
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