The Central Bank of Nigeria is the latest major financial institution to place a ban on crypto exchanges and services. The prohibition was contained in a circular issued by the CBN on Friday. According to the Central Bank’s office, the ruling is an extension of earlier warnings from the bank about the risks associated with digital currencies.
Banks to shut down crypto accounts
As part of the ban, the CBN directed all commercial banks to shut down accounts belonging to crypto exchanges and other business transacting in cryptos. The country’s top bank warned of penalties for any bank who failed to comply with the crypto ban. This is second time that Nigerian commercial banks have been warned to steer clear of cryptos.
Though Bitcoin has been rising in popularity among Nigerian youth for years now, a surge in crypto activity was seen last year during the height of police brutality protests. At the time, the central bank ordered the suspension of bank accounts belonging to supporters of the EndSARS movement, prompting a switch to Bitcoin (BTC) and crypto donations.
Bitcoin adoption surging in Nigeria
Despite hostility towards crypto by Nigerian regulators and centralized units, BTC adoption in the country continues to be in the rise. According to Google trends data, Nigeria still tops the log as the country with the most BTC searches. The ban is similar to the one that had been put in place by its Indian counterpart, before the country’s Supreme Court reversed the decision.
The ban is likely to be contested in court and things could go like they did in India. At a time when there is a rise in consciousness among Nigerian youth and a focus on cryptocurrencies, there should be a major development in the coming weeks with regard to this ban. Popular Nigerian Hip Hop star Davido recently tweeting his plans to start a Bitcoin venture, is an indication that cryptos are gaining traction in Africa’s most populous country.
Image Courtesy of Pexels