Following the recent news release by the Central Bank of Nigeria, CBN, banning financial institutions from all cryptocurrency transactions. The CBN on Feb 5 ordered a crypto ban on all transactions and the closure of all accounts involved with cryptocurrencies.
The Central bank warned that any financial institution that breaches the order would face severe sanctions. In view of this recent release, the central bank has asked these institutions to close all accounts that trades cryptocurrencies. Following the news, Binance has suspended Nigerian accounts on its platform.
The new crypto ban would weigh heavily on traders – particularly the Youths. In Nigeria, about 43.69% of the population are Youths and they are expected to be the most hit by this news. However, Nigerian Youths have remained unperturbed by the recent order from the regulatory body.
In 2020, Nigeria topped the charts in terms of transaction volume, when the value rose above $400 Million. This year, Nigeria already has the highest google searches for the word “Bitcoin.” Nigeria’s trading volume make up a large percentage of the total amount from Africa.
If the regulation should stand, crypto exchanges like, Luno, who depend on the bank details of the users to perform transactions on the platform are going to be greatly affected. This move from the government will keep users’ funds locked on such platforms till the ban is lifted.
When the platforms are eventually opened, one of these two things will surely happen: either the users’ wallets are worth more or they are worth less, depending on the crypto asset that was locked up in their wallet.
Even though the crypto ecosystem in Nigeria is not yet fully formed and is still developing. Nigerians simply couldn’t understand the rationale behind the government’s action. A twitter user in Nigeria proposed that crypto holders should transfer their crypto to Ghana, then convert it to Naira. However, many others are calling for a protest, as this seems like a trampling on their rights.
This post was last modified on February 9, 2021 6:55 am
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