CBN Crypto Trade Ban: Since the news of the crypto trade ban in Nigeria surfaced, so many people were angry (especially the youth). Well, to some it’s a good move while to others it’s not a move even close to been considered as reasonable.
So , over the past few weeks our team did some research and gathered some things that might actually interest you. There are actually some things you don’t know about the CBN Crypto Trade ban in Nigeria.
And we’ll try to clear things up for you with the article. First, it’s not the first time CBN is going against crypto trade in the country. Second, are they within their right to ban crypto trade? Third, what does this crypto trade ban include and what are the loop holes.
Fourth, what are the alternatives available for bitcoin and other crypto traders in the country. And lastly, did CBN did the right thing by banning the trade of bitcoin and other crypto in Nigeria?
Let’s get started with the first one. Let’s travel back to 2017 to know when the crypto trade ban by CBN actually began.
CBN statement on crypto trade in 2017
Back in 2017, the Central Bank of Nigeria through a public statement made it clear that they are not in support of the use of any virtual currency. Virtual currency includes any form of currency that can’t be held physically.
So, the likes of Bitcoin, Ethereum, Ripple etc were not in the good books of CBN. The Apex bank also went on to state two important reasons why they don’t trust virtual currencies.
One, they said transactions on virtual currencies can’t be traced which makes it very dangerous. Secondly, it can be used to fund criminal activities. But a third reason which was not stated is that no VAT, tax or bank transfer charge is included when sending and receiving crypto.
You can refer to the picture above to see the full statement of CBN back in 2017. So in an effort to control use of Virtual currency back in 2017, CBN made it compulsory for crypto exchange platforms to have a KYC (know your customer) policy.
The KYC policy makes it compulsory for exchange platforms to verify their users before they can trade. KYC includes use of passport photographs, valid ID card and even address verification.
Fast forward to 2021 and CBN issued a new statement shutting down the trade of bitcoin and other crypto completely in the country. Read about the new release by CBN here. This leads to the question, does CBN have the right to ban bitcoin and crypto trade in the country?
Is it withing CBN right to ban bitcoin and crypto trade?
Technically the short and simple answer is Yes. While there are lots of rules and regulations governing CBN, part of their job is to make sure they issue legal tender. This means, they decide what can be use as a currency in the country.
Plus they are also responsible for keeping the stability of the money in the country. If they feel anything is a threat to the economy, they can decide to step in (in this case they see bitcoin and crypto trade as a threat).
Again, they also have the job of making sure money transfer is regulated. They want to control the flow of money, where it was sent from and where it was sent to. Obviously they can’t perform this with bitcoin and crypto transfers.
Call it ignorance, say it’s politically motivated, but CBN is well within their right to be concerned over the use of bitcoin and other crypto in the country. Read more about the duties of CBN Here.
What the new CBN Crypto Trade Ban Includes
What is the extent of the crypto trade ban by CBN? Well the statement from CBN didn’t exactly specify. It almost appears as if an amateur wrote the memo which didn’t actually state how far crypto trade should be stopped.
The recent memo only instructed banks and other financial institutions to block bank accounts that traded bitcoin and other crypto.
Which means, your Nigeria debit card can’t be used in any crypto exchange platform. No crypto exchange platform will allow it’s Nigerian users to buy crypto in its platform. Your bank account can not also be linked with any crypto exchange platform. But there are lots of areas where the memo didn’t quite get it right.
For example, bitcoin and crypto exchange platforms are still allow to function in the country. Which means Nigerians can still own bitcoin and other crypto assets. Plus, the memo did not specify if sending money for bitcoin or crypto purchase via mobile app is a sin.
Basically, Mr A can still privately send BTC to Mr B and he gets paid via mobile app transfer without CBN or their banks been aware. Which leaves the question, what is the essence of the ban if Nigerians are still allow to own crypto assets?
Ways you can trade bitcoin and other crypto in Nigeria
There are lots of ways you can still buy and sell crypto in Nigeria
1. Bank transfers
2. PayPal funds
3. Skrill dollar
5. Escrow groups
We wrote two articles explaining how you can go about it. Please check this page to see the See Also link and read more about various ways you can trade bitcoin and crypto in Nigeria.
Is CBN right to ban bitcoin and crypto trade?
There is two side to the coin and we’ll talk about both. Technically speaking, CBN is right to put a stop to bitcoin and crypto trade. For starters, CBN have reasonable concern for banning the trade of crypto. It might not seem like it but CBN is trying to protect Nigerians from frauds and minimize criminal activities.
But practically speaking, they can’t and should not have banned the use of crypto. I mean, this ban on crypto trade is a waste of time and paper. Forex platforms, big companies and even the likes of Elon Musk are investing in crypto. Maybe the best way for CBN to go about it was to look for ways to control use of crypto and the introduction of KYC was one way to go about it.
With a memo such as this, it appears those working at CBN have little or no knowledge about bitcoin and crypto trade.
So in conclusion, the CBN crypto trade ban in Nigeria was not necessary. Instead of just stopping banks, they should just stop crypto exchange platforms from operating in the country. That is what they should have done if they really mean to ban crypto trade in Nigeria.
Note that we are no financial advisers and every info here are suggestions and you can also decide to ignore them completely. This post is not also meant to go against CBN order. It’s purpose is to show alternative ways to buy Crypto for crypto traders. You are solely responsible as to how you use the information provided here.