The Central Bank of Nigeria’s crypto ban was the hottest cryptocurrency news in the country. The CBN issued the ruling on February 5 and implemented it on the same day. As a result, it sent Nigeria’s crypto community in a tailspin.
People scrambled to secure their assets. Binance urged traders to withdraw their NGNs to avoid channel issues. Meanwhile, experts criticised the ruling on social media. But this does not mean that Nigerians can no longer engage in crypto exchanges. With blockchain experts, they can continue investing in bitcoin and other digital currencies.
Why the Central Bank of Nigeria Banned Cryptocurrency
The CBN considers cryptocurrency as a threat to Nigeria’s financial system. The ban serves to reiterate its 2017 stance on cryptocurrencies. But it does not impose new restrictions on digital assets.
Unlicensed and unregulated entities issue cryptocurrencies. So they go against the CBN Act (2007). CBN also stated that they are used for criminal activities, such as money laundering.
To clarify, the CBD didn’t prohibit cryptocurrencies in Nigeria. That’s only possible by outlawing crypto trading and shutting down the Internet. The ban only cut one of the primary links between users and their crypto exchanges. So most traders turned to digital asset management solutions like peer-to-peer trading.
Bitcoin Trading Surges After Crackdown
At $80,000, bitcoin trading is up by more than $20,000 per coin in Nigeria after the ban. This is leagues higher than the cryptocurrency’s global price of $52,000. It is also the biggest premium in bitcoin’s history with one bitcoin costing $20,000 more than anywhere.
On top of that, experts believe that prices will only continue to rise.
NairaEX, one of the leading Nigerian bitcoin exchanges, now only has one bitcoin for sale. It costs more than 52 million Naira. This converts to $65,000 USD, which is higher than any market worldwide.
Why Bitcoin Will Remain Popular in Nigeria
Nigeria is one of the wealthiest countries in Africa, and some of it is thanks to cryptocurrency. In the last five years, Nigerians have traded around $600 million in bitcoin. As a result, the country has become a major bitcoin market, second only to the United States.
Bitcoin is an excellent digital asset management solution for Nigerians. It lets them bypass costly remittance services when they trade in and out of the country. As a result, they enjoy more opportunities to trade, invest, and build their wealth.
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