The Central Bank of Nigeria (CBN) recently explained that rumors of a general crypto ban were a misunderstanding.
The central bank said it did nothing more than draw a line between crypto-related banking operations and the public use of cryptocurrencies. Essentially, this means that traders in Nigeria have complete freedom to transact with cryptocurrency as long as it is not used for illegal purposes.
Major Signals
- Nigeria's central bank has allegedly denied that they imposed restrictions on cryptocurrency use.
- The central bank issued a decree on February 5, 2021, prohibiting banks from enabling crypto-related transactions.
- Nigeria has the largest Bitcoin trade volume in Sub-Saharan Africa.
A senior executive with Nigeria's central bank has allegedly denied that his institution has imposed restrictions on cryptocurrency use. The comments by Adamu Lamtek, who spoke on behalf of CBN governor Godwin Emefiele, come after the central bank issued a decree on February 5, 2021, prohibiting banks from enabling crypto-related transactions. Financial institutions started complying with the instruction almost instantly after the statement. Since then, volumes on centralized cryptocurrency exchanges have plummeted, while reports indicate that volumes on peer-to-peer platforms are increasing.
Many leaders in Nigeria's blockchain and fintech communities and even Nigerians themselves responded angrily after the CBN ordered banks to stop facilitating crypto transactions. One of the people who disagreed with this move by the central bank is the Managing Director of Jelurida Africa DLT, Adedayo Adebajo. He believed that many people in the country agreed that regulating the industry was better than outrightly banning it.
Non-crypto parties also spoke out against it, including members of the Nigerian Senate and the country's Vice President, Yemi Osinbajo. Bitcoin has been a means of livelihood for some of the country's young people and a hedge of inflation for the naira which has been losing strength against the dollar recently. The ban didn't seem to have stopped much cryptocurrency trading in the country rather it drove more of the country's crypto community from centralized trading platforms to peer-to-peer platforms. Paxful, Binance, Remitano as other P2P platforms saw a large influx from Nigerian crypto holders.
Nigeria has the largest Bitcoin trade volume in Sub-Saharan Africa, nearly tripling that of its closest rival. Nigerians were the most likely to say they used or possessed cryptocurrency out of 74 countries polled in the Statista Global Consumer Survey. According to the poll, 33% of Nigerians have used or owned cryptocurrency.
Africa's appeal among various players in the crypto scene, from Bitcoin researchers like Matt Ahlborg to altcoin developers like Charles Hoskinson, has grown as a result of this surge in crypto adoption. Charles Hoskinson is working with some African governments to open up ADA to arrival.
Lamtek, the Central Bank of Nigeria's (CBN) deputy governor in charge of corporate services, claims that his organization's directive only applies to the banking industry. This gives many hope that this might open up faster adoption and regulation for cryptocurrencies in Nigeria.
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