Slaiz Audio Player v2.0.3

00:00
00:00
Slaiz Playlist


The CBN Bill on Cryptocurrency; it's Implications and a Way Forward

Shalom Solomon

As of the 5th of February, 2021, the Central Bank of Nigeria joined other countries like China, Saudi Arabia, Russia, Canada and formerly India to pass a bill banning Nigerian Banks' involvement with Cryptocurrency operations.

Photo Credit: Pixabay

What Does the Bill Mean For Crypto-Users?

The Central Bank of Nigeria, reinforcing it's circular which was released in 2017, has banned Nigerian Banks and financial institutions from having anything to do with Cryptocurrency exchange with strict penalties.
The bill stated that Banks are authorized to close accounts associated with cryptocurrencies in anyway. 
What this bill does not prohibit however is the owning of Cryptocurrency. It is therefore still very much legal to own Cryptocurrency in Nigeria.
Read the letter below:

Why Did the CBN Pass the Bill?

The Central Bank of Nigeria has so far not released an official reason for the passing of the bill.

Tosin Olugbenga a Nigerian Block Chain Engineer told coindesk that the CBN may have issued the directive because the rapid increase of Bitcoin's price in 2020 has made a lot of Nigerians develop interest in cryptocurrencies and a lot of them are converting their earnings in Naira to Cryptocurrency.
He said "They’re moving money from naira to crypto. That is what the CBN sees and has taken issue with. It is not banning crypto trading. It’s just telling financial institutions not to allow their platforms to be used to buy or sell crypto on exchanges like binance".

The Implications

Now although this bill does not infact illegalize the possession of Cryptocurrency, as said earlier, it still serves a huge blow to the Nigerian crypto sector.
  • Trading platforms like Busha, Luno and Jackocoins that serve as points of exchange from Cryptocurrency to Fiat currency and back would no longer accept deposits in Naira or have anything to do with transactions involving Nigerian Banks. Binance has already temporarily suspended deposits in Naira with effect from 7:00pm yesterday (25th February, 2021).

Photo Credit: coindesk

  • Nigerian stores like Regal Flowers, CloudSMS, Gigalayer, FastTech and others that accept payment in form of cryptocurrency would soon pull down the option of accepting Cryptocurrency as payment from customers. 

  • According to some Business Analysts, the new law would affect foreign investments. In that, it would reduce the confidence of foreign investors in the sustainability of investing in Nigeria and growing it's economy.
  • Finally, although the bill would definitely make trading difficult if not impossible in Nigeria, it would in no way tamper with people's Cryptocurrency wallets. So your Bitcoin stash is still safe.

Possible Way Forward

The only way forward for Cryptocurrency exchanges would be through peer-to-peer (P2P) trade. This was the method adopted in India when it's Central Bank banned Cryptocurrency in 2018 after series of crimes associated with Cryptocurrency.
Crypto users would have to directly engage to trade. If you want to buy or sell Cryptocurrency you'd have to find someone interested in trading. 

Pay in cash or to the person's bank account without stating the reason for the deposit then, the person transfers the Bitcoin (or any other type of Cryptocurrency) to you.
P2P trading would require a lot of trust between both parties involved and would incur a lot of risks.
There is also a possibility that trading platforms like Luno might soon develop P2P platforms for trading in Nigeria.

Pay in cash or to the person's bank account without stating the reason for the deposit then, the person transfers the Bitcoin (or any other type of Cryptocurrency) to you.
P2P trading would require a lot of trust between both parties involved and would incur a lot of risks.
There is also a possibility that trading platforms like Luno might soon develop P2P platforms for trading in Nigeria.

There is also a huge chance that the Nigerian Central Bank might withdraw the bill like India did in 2020. 
Until then, life goes on and since money must flow, Cryptocurrency would find a way to still move around the restrictions in Nigeria.
Peace...

Comments

Jhon Doe

- 20 October, 2018

Lorem ipsum dolor sit, amet consectetur adipisicing elit. Accusamus numquam assumenda hic aliquam vero sequi velit molestias doloremque molestiae dicta?

Jhon Doe

- 20 October, 2018

Lorem ipsum dolor sit, amet consectetur adipisicing elit. Accusamus numquam assumenda hic aliquam vero sequi velit molestias doloremque molestiae dicta?

Leave a comment

Extrigs! In Your Inbox

Don't miss out! Get the best of our blog posts directly in your mailbox.



You May Also Like

Trending in Tech World: Learn About the Almighty Internet of Things.

This piece is packed with all you need to know about the Internet of Things, one of the top trends of the tech world in simple, none techie language. Enjoy.

Technology

  • 1 year ago
  • Shalom Solomon

All You Need To Know About Artificial Intelligence (AI)

So, if you are like me that thought AIs are human looking robots, sit back and join me let’s get a crash course on Artificial Intelligence.

Technology

  • 1 year ago
  • Shalom Solomon

THE WORLD'S BLACK BILLIONAIRES IN 2021

...black people who made the list of billionaires and how they gained their financial status...

Business

  • 9 months ago
  • Shalom Solomon

FACEBOOK REBRANDING AND MARK ZUCKERBERG'S METAVERSE

Currently, the social media, tech giant, Mark Zuckerberg has announced a new step for social media space...

Technology

  • 9 months ago
  • Shalom Solomon

THE FUNDAMENTAL PRINCIPLES OF EFFECTIVE GRAPHIC DESIGN

The principles of graphic design are rules and guidelines that govern the effective use of images and other design elements to efficiently solve a communication problem.

Technology

  • 9 months ago
  • Shalom Solomon

IMPORTANCE OF PRINT MEDIA ADVERTISING FOR EVERY BUSINESS

See why print media advertising remains the best option for advertising your business...

Marketing

  • 9 months ago
  • Shalom Solomon

TRADITIONAL MARKETING: It's benefits for business marketing

What are is traditional marketing, what are it's benefits? Read on....

Marketing

  • 10 months ago
  • Shalom Solomon

The Different Types of Mobile Applications Software

The three types of Mobile apps and their defining features with examples.

Technology

  • 1 year ago
  • Shalom Solomon

10 Business Models You Need to Know

All you need to know about what business models are, why you need a business model and some types of business models.

Business

  • 1 year ago
  • Shalom Solomon

Examples of Top Brands and the Effects of Their Brand Colours

Top Brands, their brand colours and lessons we should learn from them.

Marketing

  • 11 months ago
  • Shalom Solomon