The announcement by the Central Bank of Nigeria (CBN) on February 5, directing commercial banks and other financial institutions to desist from facilitating cryptocurrency transactions stirred reactions across various quarters. CBN in a statement by its acting Director of Corporate Communications, Osita Nwanisobi on February 7, went further to clarify that its circular of February 5 was not placing any new restrictions on the use of cryptocurrencies, as it had earlier prohibited banks from dealing in same, in circulars dated January 2017 and February 2018. The statement, which sought to justify the ban on cryptocurrencies highlighted terrorism financing, money laundering, high risk of loss of investments as some of the challenges associated with the use of digital currencies.
Nigerians being the second biggest users of cryptocurrencies have reacted to the CBN’s reiteration of the ban. Some experts have countered the position of the CBN on the risks associated with cryptocurrencies. They argue that all payment service platforms have the risk of fraud, which can be managed by introducing relevant regulations. There are also arguments that the CBN ban is obstructing a wealth creation opportunity, as it is coming at a time when the world is battling economic recession and individuals are exploring cryptocurrencies as recession-proof financial options.
Also, some observers have pointed out that the ban does not preclude individuals from trading in cryptocurrencies as the ban does not have any significant effect on the larger cryptocurrency market, although it may mean sourcing the currencies from other countries. It would appear that those most affected by the ban are Nigerian cryptocurrency trading platforms, who provide crypto-exchange services.
Indeed, many countries across the world have bans or restrictions on the use of cryptocurrencies. However, this recent ban by the CBN is seen in the light of several decisions, measures and policies of the Nigerian government, which are targeted at posing difficulties for citizens.