Several concerns awashed the social media following the recent circular issued by the Central Bank of Nigeria (CBN) to Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs) and Other Financial Institutions (OFIs) to close all accounts involved in dealing with cryptocurrencies or facilitating payments for cryptocurrency exchanges in the country. According to the CBN, the policy directive became necessary  due to the opacity of cryptocurrencies that have made them become well-suited for conducting many illegal activities such as money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion. The CBN also noted that unlike Fiat Money which is accompanied by full faith and comfort of a country or Central Bank, cryptocurrencies do not have any intrinsic value and do not generate returns by themselves and are highly volatile.

Cryptocurrency is a digital currency built on blockchain technology designed to serve as a medium of exchange stored in a virtual wallet and regarded as the future of money as it is intended to solve the limitations of the traditional paper money including cross-border payments. Over 6,000 cryptocurrencies exist in the world, one of which is the Bitcoin (BTC) being the most valuable crypto. Available data from Paxful, a peer-t0-peer (P2P) bitcoin exchange, showed that Nigeria was the second world largest and African biggest bitcoin market between the period of 2015-2020 with a volume of 60,215 btc.  The year 2020 saw a surge in bitcoin price as investors including institutional investors perceived the digital asset to be a safe haven amid the economic downturn caused by the Covid-19 pandemic and in a similar vein, other cryptocurrencies saw uptick in prices.

While we recognize the validity of some of the Apex banks fears, many stakeholders see the decision as despotic and irrational. Since there’s no law in Nigeria that criminalizes cryptocurrencies, many do not see the need for the CBN to deny banking access to an entire industry. The CBN had in 2017 warned that cryptos were not legal tender, and any bank that performs any crypto transaction does so at its own risk. This also appears to contradict SECs position in announcing its guidelines to regulate cryptocurrencies. The CBN however reiterated that it has no comfort in cryptocurrencies at this time and will continue to do all within its regulatory powers to educate Nigerians to desist from its use and protect our financial system from activities of fraudsters and speculators. The CBN also clarified that no new restrictions on cryptocurrencies had been placed on banks, given that all banks in the country had earlier been forbidden, through CBNs circular dated 12 January, 2017, to use, hold, trade and/or transact in cryptocurrencies.

Despite the increasing acceptance of cryptocurrencies, its legal status varies considerably across various countries and jurisdictions. While some countries have clearly permitted their use and trade, others have put in place strong restrictions, while others have banned them out rightly. In our view, the CBN needs to look at the implication of this policy holistically while carrying all stakeholders.

Desk of the Editor In Chief

 

21 thoughts on “CBN AND CRYPTOCURRENCY

  1. Right after I at first commented I clicked the -Notify me when new opinions are additional- checkbox and now anytime a remark is extra I get four emails While using the equivalent comment. Is there any implies you’ll be capable of eliminate me from that service? Many thanks!

  2. Hi there amazing site! Does working a blog site just like this acquire a huge sum work? I’ve virtually no understanding of computer programming having said that I hoped to get started on my own website from the in close proximity to potential. In any case, if you have any solutions or guidelines for new blog entrepreneurs remember to share. I realize That is off issue but I only wanted to inquire. A lot of thanks!

  3. I was advised this blog by means of my cousin. I’m not particular whether or not this publish is penned by the use of him as no one else realize these types of detailed about my problems. You’re fantastic! Many thanks!

  4. My partner and I absolutely love your blog and find many of
    your post’s to be exactly what I’m looking for. Do you offer guest writers to write
    content for you personally? I wouldn’t mind producing a post or
    elaborating on some of the subjects you write with regards to here.
    Again, awesome website!

  5. I’m no longer sure the place you are getting your info, however
    great topic. I needs to spend a while learning much more or
    working out more. Thank you for excellent information I was looking for this info for my mission.

  6. I am extremely inspired together with your writing skills and
    also with the structure for your blog. Is that this a paid theme or did you modify it your self?

    Either way stay up the nice high quality writing, it’s rare to look a great blog like this one nowadays..

  7. Right after I originally commented I clicked the -Notify me when new feedback are added- checkbox and now each time a remark is included I get four emails While using the equivalent remark. Is there any suggests you’ll be capable to eliminate me from that provider? Many thanks!

  8. Hi there, just became aware of your blog through Google, and found that it’s really informative.

    I am going to watch out for brussels. I will appreciate if you
    continue this in future. Many people will be benefited from your writing.
    Cheers!

  9. Howdy, i read your blog occasionally and i own a similar one and i was just curious if you
    get a lot of spam responses? If so how do you protect against it,
    any plugin or anything you can advise? I get so much lately it’s driving me
    crazy so any support is very much appreciated.

  10. I was wondering if you ever considered changing the page layout
    of your site? Its very well written; I love what youve got to say.

    But maybe you could a little more in the way of content so people
    could connect with it better. Youve got an awful lot of text
    for only having one or two pictures. Maybe you could space it out better?

  11. Thanks for your personal marvelous posting! I genuinely
    enjoyed reading it, you might be a great author.I will make sure to bookmark
    your blog and will eventually come back very soon.
    I want to encourage you to ultimately continue your
    great work, have a nice weekend!

  12. naturally like your web site but you need to test the spelling on several of your posts.

    Many of them are rife with spelling problems and I to find it very bothersome to
    tell the reality nevertheless I’ll surely come again again.

  13. An impressive share! I’ve just forwarded this onto a coworker who has been doing
    a little homework on this. And he in fact bought me dinner
    because I found it for him… lol. So let me reword
    this…. Thanks for the meal!! But yeah, thanks for
    spending time to discuss this issue here on your internet site.

Leave a Reply

Your email address will not be published. Required fields are marked *