Nigeria Declares War on Cryptonics

In Nigeria, the central bank has once again reaffirmed the illegality of cryptomoney and ordered banks and financial institutions to close all accounts linked to these digital currencies. In detail, the latter are prohibited from « using, holding, exchanging and/or transacting with encrypted currencies ».

A firm position that the monetary issuing institution justified in a communication published on Sunday. Presented as encrypted, opaque tools, preventing any surveillance and therefore unable to be settled, digital currencies are considered to present too great a risk for the national financial ecosystem. The Central Bank Of Nigeria (CBN) said the risks include « loss of investments, money laundering, financing of terrorism, illicit flow of funds and criminal activities » and « tax evasion » which is hitting the country hard.

But more than that, beyond serving totally opaque transactions, these currencies are accused of being used particularly for speculation, which fuels their high volatility, hence significant risks for citizens’ savings.

« (…) the CBN cannot for all these reasons accommodate itself with crypto-currencies for the time being and will continue to do everything within its regulatory powers to educate Nigerians to renounce their use and protect our financial system against the activities of fraudsters », argues the institution.

In the fund, the CBN’s decision is not new since it dates from 2017; but it is a reminder given the growing interest in Bitcoin in particular, whose prices have soared in recent months. A year ago, on 8 February 2020, Bitcoin was trading at just under $10,000. On the morning of February 8, 2021, its price was around $39,000 after having passed the $40,000 mark a few weeks ago.

As a reminder, according to a report by Citigroup, in 2018, Nigeria was the third largest Bitcoin holder in the world as a percentage of GDP after Russia and New Zealand.