The Nigerian cryptocurrency community is facing a period of uncertainty due to the Central Bank of Nigeria’s conflicting messages on the legality and regulation of crypto assets. Traders are unsure about the future of their investments and the industry as a whole as a result of CBN policies.
This regulatory confusion began in February 2021 when the CBN released a circular, prohibiting financial institutions from supporting cryptocurrency transactions, effectively banning Bitcoin and other digital currencies trading. This move caused accounts linked to individuals and entities involved in exchanges to be shut down causing concern within the crypto community.
Surprisingly in December 2023 under Olayemi Cardoso’s leadership, the CBN lifted the ban. The new guidelines recognize trends. Emphasized regulating virtual asset service providers (VASPs) which include cryptocurrencies and crypto assets. The circular detailed processes for banks and financial institutions to open accounts and offer settlement services. Handle transactions for firms dealing with crypto assets suggesting a more favourable stance, towards digital currencies.
However, this positive development was short-lived. In 2024 the Central Bank of Nigeria (CBN) took measures against Binance, the cryptocurrency exchange globally resulting in the suspension of operations in Nigerian naira and even leading to the apprehension of Binance representatives in the country. This action sent a message to the crypto community, leaving traders pondering about CBN’s motives and the future of digital assets in Nigeria.
Adding to the uncertainty, financial transaction apps in Nigeria such as Opay, Palmpay and Moniepoint issued warnings to users regarding involvement in cryptocurrency trading. They threatened to close accounts as per CBN regulations. These apps mentioned they would shut down accounts engaged in crypto asset activities and cooperate with authorities further diminishing trust within the industry.
MakeMoney.ng interviewed impacted traders who shared their frustrations and bewilderment over CBN decisions. Adebayo Ogunleye, a 24-year-old trader from Lagos expressed his concerns saying, “I’ve been trading cryptocurrencies for two years now; it has been crucial, for me and my family. Now I feel lost. I fear my accounts might be closed abruptly leaving us with nothing.”
Chioma Nwosu, a trader based in Abuja shared her thoughts, expressing the challenge of navigating through uncertain regulations, in the crypto market. “It’s like playing a game with changing rules. One moment trading is okay, the next it is not. The moment people are being arrested. How can we make plans for tomorrow when we’re unsure about what tomorrow holds?”
There are speculations that the Central Bank of Nigeria’s actions against cryptocurrencies is aim to stabilize the naira against the US dollar. However, considering that ‘millions’ of jobless Nigerian youths rely on trading for income, the repercussions of these policies could be severe.
It is evident that there is a pressing need for consistent guidelines and regulations from the CBN regarding cryptocurrency operations in Nigeria. Then will traders and businesses feel confident enough to invest in assets and contribute positively to the country’s economic growth. Until such clarity is provided Nigerian crypto traders will remain uncertain about their future and the prospects of assets within the nation.
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