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Blockchain Technology News Discuss How Nigerians Are Responding to the Crypto Crackdown

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Nigeria is the second biggest bitcoin market worldwide. Despite this, the Central Bank of Nigeria (CBN) recently passed a ruling that bans crypto trading in the country. The directive may have sent the crypto community into a frenzy. Still, it did not stifle interest in crypto trading and blockchain technology– in fact, the ban is fueling it.

CBN Prohibits Banks From Servicing Crypto Trade

The CBN has banned local banks from offering services for crypto trade on February 5. It issued and implemented the directive on the same day, which forced crypto traders and platforms alike to scramble and follow the ruling.

According to the ban, banks must close accounts of people and businesses that trade using cryptocurrency. Penalties await financial institutions that fail to comply.

The ban is an extension of the CBN’s 2017 position on cryptocurrencies. In other words, this is not the first time CBN acted against crypto exchanges. The central bank warned banks before to not engage in the crypto market.

Why Is the CBN Against Crypto Exchanges?

The CBN is against digital currencies because they come from unlicensed and unregulated parties, which means they have questionable legality in the eyes of the CBN. The central bank also stated that cryptocurrencies have been used to fund illegal activities, such as terrorism.

The Nigerian Security and Exchanged Commission (SEC) endorses the ruling. This is despite SEC’s previous plans to regulate digital currencies in September 2020. According to blockchain technology news, at least one senator supported the ban. The politician claimed that bitcoin has made the country’s currency “almost useless.”

Politicians and Stakeholders Criticise the Ban

Not all the members of the Nigerian Senate supported the crackdown. One senator urged the CBN to enforce regulations instead of a ban, while another cited the crackdown’s effect on the economy.

The Blockchain Industry Coordinating Committee of Nigeria (BICCON) also assailed the ruling. The body asserted that the ban was not a “mere reiteration” of CBN’s stance four years ago. BICCON also said that the CBN failed to provide notice before enforcing the ruling. The body consists of blockchain technology companies, crypto experts, and other industry players.

The Impact of the CBN Cryptocurrency Exchanges Ban

Nigeria’s crypto exchanges have virtually disappeared since the CBN’s ruling. As a result, bitcoin’s selling price in Nigeria surged. It has reached $80,000 and rising, which is more than $20,000 higher than the cryptocurrency’s global price ($52,000).

Why does BTC have different prices between countries?

Bitcoin has different prices for exchanges due to the increased costs of getting digital assets. All exchanges had a unified liquidity source that ensured crypto’s accessibility before the ban. But the ruling changed that in Nigeria. As a result, the gap between the price of bitcoin in Nigeria and the rest of the world is increasing.

Buy, Sell, and Trade Bitcoin With Confidence

The bottom line is, CBN only banned banks from facilitating crypto exchanges. So that means Nigerians can still trade with bitcoin and other cryptocurrencies, just not through Nigerian banks.

With the help of blockchain companies, Nigerians can continue participating in the global crypto market despite local regulations.

Key Coin Assets can help you buy, sell, and transact with bitcoin without fear. Our digital asset management services are up-to-date with the latest crypto trends. Get ahead of your competition despite the challenging crypto climate. Contact us NOW at 843-886-9547 to start investing in yourself!