As with many countries with a non-flexible policy regarding the emerging world of digital currencies, Nigeria recently stunned its crypto-savvy populace with a banking ban on cryptocurrency exchanges and other digital currency service providers operating on its shores. The ban entails the inability to deposit and withdraw funds in any form from Nigerian bank accounts, a policy that can practically strain out crypto activities in the country. This clampdown re-emphasized the Central Bank of Nigeria’s positioning on crypto as an unwelcomed investment activity on its shores.
While Nigeria is not the only nation in the world with an unappreciative stance about digital assets with Bitcoin (BTC) as the flagship coin, it is the most decisive nation to bring such a ban on crypto on the African continent.
Nigeria is a powerhouse when it comes to crypto transactions and the country’s cryptocurrency activities are highly reckoned with on the international stage. Remarkably, Nigeria is the largest market for peer-to-peer transactions in Africa and a ready market for cryptocurrency exchanges with good opportunities and value offerings.
Nigerians were initially pushed to embrace cryptocurrencies because of the dwindling valuation of the Naira (NGN), the country’s fiat currency. Additionally, the CBN’s monetary regulations bring drudgery to international transactions and create an attractive alternative when Bitcoin and altcoin came into the crypto space.
As it is obvious, the open-mindedness of the youthful population with a determination to break free from the country’s financial bureaucratic policies remains the selling point to misalign with the new Central Bank’s policies.
The cryptocurrency transaction activities in the country have not waned by virtue of the ban, in fact, the activities might have been considered to have skyrocketed in the past weeks. A significant implication of the ban is to engineer the rollout of innovations to open up new transaction opportunities in the space. A host of the local digital currency services platforms that use the direct escrow model to conduct transactions were the worst hit, as they needed time to adjust to alternative models.
Foreign platforms such as Binance and LocalBitcoins with existing P2P transaction models became the most favored, as the host of traders swarms into such platforms to continue their buying and selling activities. Some of these platforms also added new functionalities to gain a larger market share.
The CBN's attempt to kill Bitcoin and altcoins on the Nigerian shores also brought about increased publicity to the crypto space. For the first time, many conservative observers in the space came to know the threat the emerging technology and asset poses to existing institutions.
Those who did not also know much about digital currencies began showing renewed interest and from the pace of interest in Bitcoin in Nigeria which is at its peak as confirmed by Google trends, the most populous black nation may just be getting started when it comes to its adoption of cryptocurrencies in all of its forms (Stablecoins, Decentralized Finance tokens, etc.)