The office of the Central Bank of Nigeria in Abuja/Photo: CBN

Angry reactions as Nigeria bans buying, selling of cryptocurrency

Following a directive banning cryptocurrency trading by the Central Bank of Nigeria (CBN), Nigerians have expressed strong displeasure of the decision of the federal government under the leadership of President Muhammadu Buhari.

In a circular dated 5th February 2021, the CBN notified banks and other financial institutions against doing business in Crypto and other digital assets.

According to Wikipedia, a cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It typically does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems.

The Nigerian apex bank also directed financial institutions to close the accounts of persons or entities transacting in or operating cryptocurrency exchanges.

CBN further warned that any breach of this directive would attract serious regulatory sanctions.

“The Central of Bank of Nigeria’s (CBN) circular of January 12, 2017 ref FPR1DIR/GEN/C1R106/010 which cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs) and members of the pubic on the risk associated with transactions in cryptocurrency refers,” the statement reads.

“Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.

“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.

“Please note that breaches of this directive will attract severe regulatory sanctions. This letter is with immediate effect.”
 
However, many Nigerians including a former minister, lawmakers in the country have condemned the move saying it was ill-informed and an act of backwardness.

The protesters took to the social media to slam the federal government for what they considered to be a retrogressive action.

Here are some comments gathered by this reporter on Twitter:

Reacting to the ban, Former Minister of Education, Oby Ezekwesili, slammed the CBN, saying the order makes the country appear unprepared to embrace the future.

She tweeted, “Frankly, CBN, all you needed to do was map all the legitimate risks associated with #cryptocurrency and gather a subset of the super brilliant Nigerian young minds in #FinTech so you listen and learn more. Learning is the greatest asset of the policy-maker. Never late.

“Our country’s DNA for irony is uncanny. At the same moment, as we celebrate one of our own leading a global trade institution, we have a memo from our Central Bank making country appear unprepared to embrace the future.”

Ben Murray-Bruce, a former senator representing Bayelsa East, said, “I thought it’s universal knowledge that decisions or policy regarding finance or economy should never be hasty?”
 
Shehu Sani, former senator who represented Kaduna Central, tweeted: “Why the ban on cryptocurrency? Why are we running backwards?”

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A social media influencer Japheth Omojuwa said: “This letter, if it stands, will literally kill Nigerian companies and also harm foreign investment”.

He argued that “investors from mostly the United States have, in spite of the risks involved in investing in our country, invested in Nigerian fintech companies that this letter clearly targets”.

“This is not going to be a case of losing some money; this is a case of companies closing shop. Companies operating on investment from abroad. That’s before you address the effect on everyday Nigerians trading legitimately and looking to make ends meet in the midst of an excruciating environment and economy.”

@dj_switchaholic tweeted: “If the ban on crypto by CBN is true ehn, it points yet again to the ill informed, backward, poverty promoting dinosaurs leading us. Use your time to investigate and close accounts sponsoring terrorists in the country if you don’t know what to do!!! GAWD”

@ObongRoviel said, “Welcome to a country where our government Bans Crypto and Pardons Terrorists”

Expert says ban does not stop Nigerians to deal in crypto currency trading

The President, Bank Customer Association of Nigeria (BAN), Dr Uju Ogubunka, said the CBN’s directive does not stop people from dealing in cryptocurrencies but they cannot make any transactions with cryptocurrency through the banking system.

Ogubunka in an interview with the newspaper Vanguard said: “Cryptocurrency is not the approved legal tender of Nigeria. The CBN approved the naira as the legal tender of the country. It is within the statutory procedure of CBN that the banks and financial institutions must operate.

“The CBN is not stopping Nigerians to deal in cryptocurrency trading but they cannot do it through the banking system.”

According to gobitcoin.io, a website dedicated to Bitcoin news in Africa, countries in Africa currently trading Bitcoin are Botswana, Ghana, Kenya, South Africa and Zimbabwe.

Abeeb Alawiye

 

 

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