Review: What You Need to Know About the Cryptocurrency Ban

The Central Bank of Nigeria, a few days ago issued a circular prohibiting banks and other financial institutions from carrying out transactions in cryptocurrencies or facilitating payments for crypto exchanges.

This led to a lot of backlash from Nigerians, condemning the policy as a deliberate attempt by the government to impoverish young Nigerians who have been able to create wealth for themselves.

Today on Breakfast Central, Olisa Chukwumah and Tolulope Adeleru-Balogun had a conversation with Financial Analyst, Tunji Andrews on what excatly this ban means.

He began by correcting that first of all, it is not a ban, it is just a reminder by the Central Bank to its constituency not to enable cryptocurrency exchanges. Anyone could still do cryptocurrency if they want to, it is only the banks that are not allowed to perform transactions.

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The CBN conversation is always about money stability. They became uncomfortable with this because there was an inflow of money (some dollars) from outside the country without them being involved; and also people receiving dollars directly to them without the money actually coming into the country.

Tunji agreed with the CBN stating that cryptocurrency enables fraud, it might be a stretch of the truth but it does happen. Money stability, issues against fraud, issues against terrorism funding, also, they not able to track or trace the transaction to the other side are the key reasons why the CBN is against crypto.

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“It is important to note that one of the major factors that made cryptocurrency popular in Nigeria is the lockdown. When banks were not open and there were few bank transactions, so people switched to crypto as a means of transferring money from outside the country. Nevertheless, after the lockdown, it continued and also became a means where people could engage in weird and illegal transactions,” he said.

He concluded that China is trying to create its own cryptocurrency and banning all the other digital monies, something which Nigeria could choose to do as a way to get more control and regulations of these new digital currencies.

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