It has been series of back and forth after the Central Bank of Nigeria (CBN) crypto ban. The apex bank ordered financial institutions to stop providing support for crypto firms in the country. The country’s apex bank also directed that the bank blocks accounts of crypto traders.
However, this move by the county’s apex bank has met with heavy resistance from several quarters in the country as the CBN insists that the crypto ban must stand. The most recent person to resist the ban is the vice president of the country Prof. Yemi Osibanjo.
Osibajo, in his keynote address at the CBN Bankers’ Committee Economic Summit, tipped digital assets to challenge traditional and reserve banking in the future fiercely. The vice president admitted to the disruptive capacity of cryptocurrencies and blockchain technology, stating that they could displace existing banking systems in the coming years.
He further opined that emerging technologies like blockchain must be adopted strategically before praising the regulatory bodies for being ‘very articulate’ with their measures. He called for initiatives that will enable people to enjoy the benefits of blockchains and cryptocurrencies while keeping the adverse effects in check.
Cryptocurrencies in the coming years will challenge traditional banking, including reserve banking, in ways that we cannot yet imagine, so we need to be prepared for that seismic shift. pic.twitter.com/tbIR8eah2s
— Prof Yemi Osinbajo (@ProfOsinbajo) February 26, 2021
Why CBN placed a ban on crypto
The Central Bank of Nigeria (CBN), while explaining why it placed a ban on cryptocurrencies, claimed that the digital currency is used for money laundering and terrorism. The regulator also affirmed a 2017 directive to financial institutions to block cryptocurrency accounts.
“The use of cryptocurrencies in Nigeria are a direct contravention of existing law,” the statement said. “It is also important to highlight that there is a critical difference between a Central Bank issued Digital Currencies and cryptocurrencies. As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities,” a statement released by the CBN said.
The CBN governor, Godwin Emefiele, also, while addressing legislators on the crypto ban said they did it in Nigerians’ best interest.
Emefiele described crypto as dangerous and said the anonymity of cryptocurrencies issued by unknown and unregulated entities and its anonymity makes it easy for those who indulge in illegal activities such as money laundering, terrorism financing, purchase of small arms, and light weapons, and tax evasion.
What next after crypto ban in Nigeria
Would the ban be reversed, or would the government impose further restrictions on cryptocurrencies? This is a question nobody has an answer to. However, despite the CBN insistent that crypto is a threat, crypto enthusiasts in the country have continued to fight back and call for a change in crypto regulation in the country.