‘Why We Have Banned Trading Of Cryptocurrency In Nigeria’ – CBN


‘Why We Have Banned Trading Of Cryptocurrency In Nigeria’ – CBN

The Central Bank of Nigeria (CBN) has dropped some explanations concerning the decision to ban cryptocurrency trading in the country.

It could be recalled that the CBN shocked Nigerians with its directive that all banks and financial institutions should close the accounts of all cryptocurrency traders.

In a report by the Daily Trust, the Acting Director of Corporate Communications of CBN, Osita Nwanisobi has revealed why the apex bank had to take the decision.

The report reads;

“The use of cryptocurrencies in Nigeria are a direct contravention of existing law.

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It is also important to highlight that there is a critical difference between a Central Bank issued Digital Currency and cryptocurrencies. As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities.

The question that one may need to ask therefore is, why any entity would disguise its transactions if they were legal.

It is on the basis of this opacity that cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion.

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Many banks and investors who place a high value on reputation have been turned off from cryptocurrencies because of the damaging effects of the widespread use of cryptocurrencies for illegal activities.

The role of cryptocurrencies in the purchase of hard and illegal drugs on the darknet website called “Silk Road” is well known. They have also been recent reports that cryptocurrencies have been used to finance terror plots, further damaging its image as a legitimate means of exchange.

More also, repeated and recent evidence now suggests that some cryptocurrencies have become more widely used as speculative assets rather than as means of payment, thus explaining the significant volatility and variability in their prices.”

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