Bearish for BTC: Nigeria’s central bank apparently wants to ban Bitcoin and cryptocurrencies
Bitcoin is gearing up for a surge to the next all-time high – but the Central Bank of Nigeria (CBN) is currently reminding financial services providers that trading in cryptocurrencies is banned. The letter, signed by Director Bello Hassan, warns of severe regulatory sanctions for those who do not comply.
Hassan says financial service providers must identify trading Immediate Edge in cryptocurrencies and immediately close accounts associated with this action.
„Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities operating or running cryptocurrency exchanges in their systems and ensure that such accounts are closed immediately.“
This, the bank believes, is necessary to guard against the risks associated with cryptocurrency.
Nigeria is Africa’s largest cryptocurrency market
It is true that trading in cryptocurrencies is not illegal in Nigeria. However, the CBN has a dim view of the private digital currency sector.
In 2018, they issued a statement saying that cryptocurrencies are not recognised as legal tender. They also warned that there would be no turning back should anything go wrong.
Despite this, Nigeria is still the largest cryptocurrency market in Africa. Indeed, a confluence of reasons makes Africa ripe for digital currency expansion. These include poor access to banking services, a young, tech-savvy population and local currency instability.
Ekene Ojieh, head of public relations at analytics firm Buffalo Chase, addressed several of these points, saying:
„It is easy for a young country like Nigeria to adopt the use of Bitcoin because a large percentage of the population falls into the age group that is tech savvy. Although, that is not the only reason why many Nigerian youths are adopting bitcoin.
Nigerian youths would rather buy bitcoins or secure their assets in stablecoins because the naira is vulnerable to inflation like any other fiat currency.
Based on this statement, it seems the CBN is fighting a losing battle.
Indian central bank also cracks down on bitcoin
Nonetheless, the CBN is not the only central bank renewing its efforts to crack down on cryptocurrencies. Similar to Nigeria, authorities in India are fighting an uphill battle to suppress the cryptocurrency industry.
The Indian Supreme Court overturned a Reserve Bank of India (RBI) decision that banned banks from trading cryptocurrencies in March last year.
However, the legislature recently tabled the Cryptocurrency and Regulation of Official Digital Currency Bill. This bill provides a framework for a central bank digital currency while banning private digital currencies.
Nischal Shetty, founder of crypto exchange WazirX, has stepped up his #IndiaWantsCrypto campaign. He is calling for a grassroots response by contacting members of parliament to oppose the bill.