Nigeria scraps plans to clamp down on crypto in view of central bank’s ban order

The latest clampdown by Nigeria’s central bank on the digital currency has triggered anger and perplexity in a nation where bitcoin has grown tremendously in the last five years.

Next to the United States, Nigeria is the world’s second-biggest market for bitcoin, the world’s first — and most popular – decentralized digital currency. Nigerians see cryptocurrency as a safe haven asset in a struggling economy.

Nigeria’s Securities and Exchange Commission on Friday said it had put propositions to regulate virtual currencies on hold in the wake of the Central Bank of Nigeria’s ruling to restrict its use, CoinDesk said, citing a report by Guardian Nigeria.

No, not yet

In its latest circular, the CBN ordered commercial banks and other financial institutions to suspend accounts that transact in or operate on digital currency exchanges. All deals that involve cryptocurrency are now restricted with “severe regulatory sanctions” awaiting erring outfits, Quartz Africa disclosed.

“For the purpose of admittance into the SEC regulatory incubation framework, the assessment of all persons and products affected by the CBN circular is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system,” CoinDesk quoted the SEC as saying in a statement.

Shuaibu Idris, the managing consultant at Time-Line Consult, suspects the central bank had anticipated a looming crisis in the cryptocurrency trade. He claims there was around $4 billion of assets implanted in cryptocurrencies in Nigeria.

Nigerians undeterred

While the 2017 circular restricted major financial institutions from transacting in electronic money, it did grant them authority to have exchanges as customers on the condition they comply with certain requirements.

Since then, the volume of bitcoin trade in Nigeria has increased by nearly 20% annually. Based on the latest projections, Nigerians have traded almost $600 million in bitcoin in the last five years.

Despite the central bank’s announcement, the Nigerian bitcoin community has been largely unfazed, using peer-to-peer (P2P) exchange platforms that enable them to continue trading.

 

Image courtesy of Sabrina & Friends/YouTube Screenshot

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