The Central Bank of Nigeria has not placed a ban on Bitcoin. The partial backtrack came from a representative of the institution, Adamu Lametek, who spoke on behalf of Governor Godwin Emefiele at a seminar.
A few weeks ago, the Central Bank of Nigeria (CBN) had imposed a ban prohibiting banks from offering services to users trading cryptocurrency. This caused trading activities to shift to exchanges and peer to peer platforms.
Now, according to Today NG, the ban is to be interpreted in another way. Adamu Lametek is reported to have stated:
“The CBN did not place restrictions from use of [sic] cryptocurrencies and we are not discouraging people from trading in it. What we have just done was to prohibit transactions on cryptocurrencies in the banking sector”.
Why Nigeria’s ban on Bitcoin is ineffective
The point is that the decentralized nature of Bitcoin and cryptocurrencies prevents a total ban. Proof of this is that even in China, where there is a ban, crypto trading continues on other platforms.
The Central Bank of Nigeria has no choice but to take note of this: Bitcoin cannot be stopped. All that can be done is to prevent trading from going through banks, given the unregulated nature.
In a recent press release issued following the ban, the Central Bank of Nigeria explained all the concerns inherent to Bitcoin and cryptocurrencies. Ranging from anonymity to volatility, a marked distrust of these new technologies emerged. The ban, the bank explained, served to protect investors.
The text concluded thus:
“The CBN has no comfort in cryptocurrencies at this time and will continue to do all within its regulatory powers to educate Nigerians to desist from its use and protect our financial system from activities of fraudsters and speculators”.
However, the increase in trading activities shows that despite the central bank’s stance, Bitcoin adoption in Nigeria is growing. Bitcoin in fact finds fertile ground especially in poor states, because BTC is seen as a safer and more valuable currency than local currencies that are always subject to devaluation.