The Central Bank of Nigeria, on 5 February, 2021 announced the ban of cryptocurrency purchase and trading in the country.
The circular which bears the insignia of the CBN and signatures of two of its top officials, orders regulated financial institutions to identify people and organisations trading in crypto and close their accounts immediately. It threatens severe regulatory actions on financial institutions that refuse to co-operate.
The ban comes as a shock to many, including those in the crypto industry. Sources within the industry say there was no communication beforehand. While many expected some kind of regulation in the future, the suddenness and seeming totality of it has deeply shaken the industry.
The ban follows the path of recent regulatory practices where stakeholders are not consulted or even spoken to before restrictions are placed on their service. In December 2020, the SEC placed a ban on WealthTech company, Chaka. Industry sources say that Chaka only found out about the ban on the news.
It is also a reminder of the high-handed nature of the current administration as regards regulatory practices - no warnings no discussions, just punitive measures (source https://www.benjamindada.com/cbn-nigeria-ban-crypto/..by Orahachi Onubedo 2021-02-05)
Have been wondering if the CBN ( Central Bank of Nigeria) is doing the right thing by eradicating crypto in the system.
Before looking into the matter let's take our mind back to what bitcoin and other blockchains was in the Nigerian system.
During the police brutality protests in Nigeria in October, bitcoin saved the day when the government shut out protesters from using local payment platforms for collecting donations to support it.
The young, tech-savvy protesters quickly switched to using bitcoin, and in about a week bitcoin accounted for around 40% of the nearly $400,000 raised. It was just one high-profile example of how young Nigerians increasingly use bitcoin to navigate a complicated and restrictive banking and monetary system.
In the last five years, Nigeria has traded 60,215 bitcoins, valued at more than $566 million which, apart from the US, is the largest volume worldwide on Paxful, a leading peer-to-peer bitcoin marketplace. The data scraped from Coin Dance shows from the beginning of May 2015 to the middle of November this year, bitcoin trade in Nigeria have increased yearly at least 19% in volume since 2017, and the highest volume (20,504.50) was traded in 2020.
Bitcoin trade had its highest spike of 30% this year 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.
Peer-to-peer (P2P) exchanges, which are decentralized platforms that directly connects buyers and sellers without third parties are the most popular way to buy bitcoin in Africa because users do not have to worry about cryptocurrency regulation by the government. Paxful is the largest platform for P2P trade in Africa and overtook LocalBitcoins in June this year to be the Largest P2P bitcoin marketplace in the world, controlling 52% of the market share.
Sources:(https://qz.com/africa/ by By Uwagbale Edward-Ekpu)
Still according to the source, it was said that the company recorded Nigerians make up around a quarter of its customer base with 1.3 million registered accounts. “They mostly use the platform for peer-to-peer and arbitrage trading,” says Nena Nwachukwu, Paxful Nigeria regional manager. “Remittances is also a popular use case.” Nwachukwu says bitcoin transfers are “much cheaper and faster than using traditional money transfer operators.”
Nevertheless to the mater of the day, whats the effect of the CBN decision to eradicate crypto in the Nigerian system going through the level of crypto in Nigerian system have been made to understand that most wealthy young people in Nigeria observed cryptocurrency to be the easiest platform to which one can carry out any transaction within the globe.
To me I think this won't permit growth and peace in the nation... I don't know your own point of view please tell me what its about to happen my very good brothers and sisters in the platform thanks...