CBN & Crypto

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Crypto: Nigeria will soon have its own digital currency— CBN

“We have carried out our investigation and we found out that a substantial percentage of our people are getting involved in cryptocurrency which is not the best. Don’t get me wrong, some may be legitimate but most are illegitimate.” Godwin Emefiele

The CBN’s recent announcement by its governor on Nigeria having its own digital currency soon has been met with mixed feelings from citizens.

Following a directive issued by the Central Bank of Nigeria in February, banning cryptocurrency trading in Nigeria,  The central bank of Nigeria (CBN) has through its, Deputy Governor Adamu Lamtek clarified a statement it issued last month that seemed to order financial institutions to shut down all accounts associated with cryptocurrency trading. The directive is not to be mistaken for an outright ban but only reiterated an already imposed 2017 ban on institutions facilitating cryptocurrency transactions.

CBN had never banned cryptocurrency activity in the country. He expressly clarified.

In the meanwhile, BBC reported estimates show that of the top 10 countries for trading volumes, Nigeria ranked third place after the US and Russia in 2020, generating more than $400m worth of transactions. Consequent to CBN’s directive on the supposed ban, more cryptocurrencies were traded.  Data retrieved from Usefultulips (a Bitcoin analytic data provider) shows that the usage of Bitcoin’s peer-to-peer trading in Nigeria surged by 27% since the CBN directive took effect.

The concerns of an average cryptocurrency trader are the questionable motives of the CBN following its hostility in recent times. The truth however remains that cryptocurrency is the future of currency and everyone had better come into that awareness soon. The CBN is not excluded and would rather have its own digital currency for the nation.

The worries of cryptocurrency volatility is another factor on one end following its recent rise and deep leaving a lot of traders in humongous losses. Livemint reports Bitcoin investors lost $14.2 billion in recent crypto crash. A number of huge losses also followed on Altcoins. The market dump were reportedly instigated by Elon Musk’s tweets and maybe some behind the scenes we are not privy to. However, the concerns of its volatility remains major. The market can get choppy. Given these factors, what holds for businesses in transacting crypto as a medium of payment?

Over four years after the CBN had recognized the disruptive power of the digital currency, it backtracked in February, rolling out a new directive to insulate the financial system from the ruin of digital currency investment, a bull run that has since popped. But the CBN’s recent move is a flash in the pan in a seemingly coordinated race to curtail the speed of crypto investment or, perhaps, its volatility.

Agitations of regulatory bodies for cryptocurrencies have been voiced. Should they be regulated or not? 

The controversy continues…


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