The Central Bank of Nigeria has ordered banks and financial institutions to identify and close accounts of cryptocurrency entities with “immediate effect” on Friday, February 5. The central bank warned those who did not implement the directive that they would face "severe regulatory sanctions" in the letter it circulated to the parties involved. Nigeria's hostility towards cryptocurrencies is not new, as the country issued a warning in 2017 about the risks associated with trading cryptocurrencies. While initially omitting a full explanation of this decision, the Central Bank eventually released a statement stating that cryptocurrencies pose a threat to the Nigerian financial system. "The recent regulatory directive has become necessary to protect the financial system and Nigerians in general from the risks inherent in crypto asset transactions," the central bank said in a statement. The statement particularly highlighted the dark side of cryptography and its use for money laundering, terrorist financing, and drug trafficking due to its anonymous nature. The bank insists that this position is not new, but rather a reiteration of its 2017 tenure. However, cryptocurrency exchanges have been operating in the country since 2017, without issue until this statement was published. Exchanges like Binance and Luno have been working with clients to ensure that they are not severely affected by this sudden change.
Crypto usage in Africa
Although the entire continent cannot be considered as one entity, the problems present in many African countries are solved through the use of cryptocurrencies. The two big ones are monetary instability and remittances. Currency instability has affected different nations on the continent at different times and cryptocurrency has found its place as an alternative way of paying, saving and investing for those with volatile local currencies. Zimbabwe, the country best known for its hyperinflation and currency collapse, has seen growth in cryptocurrency trade and payments, particularly Bitcoin. By having invested in crypto, you eliminate the risk of losing all your personal wealth due to inflation or a crash. While the unstable nature of currencies like Bitcoin and Ethereum means they could also lose value, this offers another option. Remittances are the second area where cryptocurrencies are thriving across the continent. Due to weak economies, lack of employment, and persecution, many people work outside of their home countries. As a result, sending money home is one of the most important financial transactions in African countries. While there are ways to send this money across borders, they are often expensive and dramatically reduce the amount returned to the family. Cryptocurrencies have helped people avoid these high fees and conversions, making them a bit simpler but also much more beneficial as a way to send money.
Not without problem
This is not to say that there are no risks and issues when it comes to cryptocurrency on the mainland. In line with the use of cryptocurrencies in the rest of the world, banks in African countries and governments have had to deal with their use for criminal purposes and a growing concern about Bitcoin scams. South Africa recently made headlines due to its largest Ponzi cryptocurrency program, Mirror Trading International. The company allégué qu'elle négociait with a "bot" sophisticated using the IA, ce qui entraîné an excellent return on investissement for ceux who are registered, but finally the system s'est effondré et son chef a disparu avec l 'money. In other regions, similar pyramid schemes and outright scams attempting to gain access to cryptocurrency accounts have left some people stripped of their money with no recourse.