Central Bank of Nigeria Takes Drastic Action Against Bitcoin (BTC) and Cryptocurrencies

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The Central Bank of Nigeria has ordered banks in the country to close the accounts of customers who engage in the buying and selling of cryptocurrency. Nigeria’s status as the “Bitcoin Nation of Africa” now faces an uncertain future.

Prohibitions and sanctions

Nigeria’s central bank on February 5 called on all banks in the country to immediately cancel their services for companies and Nigerians who buy, sell or trade cryptocurrency.

Nigeria is considered the second country in the world in terms of peer-to-peer BTC transactions . According to data from Coin Dance , Nigeria has traded 60,215 BTC over the past five years, worth over $ 566 million, a figure only the United States has surpassed.

The ban was unveiled in a circular issued by the country’s central bank. According to the institution, the decision is only an extension of previous warnings about the risks associated with cryptocurrencies. Nigeria’s central bank has also warned of severe penalties against any bank or financial institution that fails to comply with the directive.

The local branch of Binance has already decided to suspend deposits for Nigerians . Thus, users can no longer convert naira, the country’s local currency, into cryptocurrency.

Reactions and alternatives

The directive comes just months after cryptocurrencies entered national consciousness during protests against police violence in October 2020. At the time, the central bank ordered the suspension of the bank accounts of supporters of the EndSARS movement. It was at this point that supporters of the movement began to send donations in cryptocurrency.

The embargo on cryptocurrency trading platforms by the Buhari administration has sparked an uproar among Nigerians . Since the new directive began circulating on the internet, cryptocurrency holders have launched the hashtag #WeWantOurCryptoBack which has been relayed more than 30,000 times.

However, Nigerians could find alternatives to continue buying cryptocurrency. Nigeria-based blockchain engineer Tosin Olugbenga explained that most cryptocurrency transactions and purchases in Nigeria are done on P2P exchanges and these new restrictions will have little impact.