If we are saying that in 2020, cryptocurrencies started thriving, it would not refer to all the countries in the world. If we say that the main advantage of using the decentralized system in order to execute our transactions and that it does not have borders, is not quite true because as a result, we have many countries that restrict or even ban the use and exchange of cryptocurrencies. There was the main tendency visible, that the global major economies, such as Japan, USA, Switzerland or Germany are trying to support the increased popularity of digital coins and implement them in many different services. On the other hand, there are the majority of countries that are having developing economies and do not adapt to new technologies and innovative financial sources that easily. The article will review the case of Nigeria, which was considered to be one of the main hubs for crypto exchange not only among African countries.
The current situation on Bitcoin in Nigeria
At the time of writing the article, the Central Bank of Nigeria issued a circular in early February which means that the financial institutions that were involved in the process, facilitating payments for a cryptocurrency exchange is prohibited and that there were starting to identify close accounts that were associated with this field. The representative of the central bank stated that this change was not imposed in order to discourage people from trading bitcoin but to play the role of enforcing orders after 2017 banning crypto transactions in the country. The main detail here is that this ban did not prohibit crypto exchange from using banking and payment channels. It forced the banks and financial institutions to ensure that their crypto-exchange customers are able to provide the plan against money laundering and “anti-terrorism” financing.
Nigeria is not the only country with anti-crypto attitudes, as the financial sector is facing the major popularity of bitcoin, the global economy is facing the covid pandemic crisis. There were raised concerns regarding bitcoin fluctuation in the US and Iran as well, where the crypto exchanges are blamed for polluting the air because of the mining.
Biggest Bitcoin Market in Africa
The country profile of Nigeria is the following, that it is the most populous country and has the youngest population. The country is massively buying new technologies and has become the continent’s largest Bitcoin market by trading volume. Nigeria is undergoing massive inflation, this is why the investors have done everything to stop the US dollar from leaving the country. Nigerian banks reportedly placed barriers on foreign debit card transactions and limited cash withdrawals. Those barriers can be obstructive not only for those who are involved in the trading process but also for those, who are actively involved in the entertainment sector as well. The fact is that there is a dramatically increased number of platforms that offer people online casino games and have implemented bitcoin as a payment method in it and as result Bitcoin casinos in Nigeria have massively increased in popularity. It is due to the reason that the global pandemic hindered the work of traditional casinos and solutions to this appear to be online casinos, but apparently, some countries have strict regulations on online casinos. This is when the solution to this is created as a bitcoin casino and offers people more efficient and convenient transactions.
After the imposed directive that the banks were forced to better analyze the company’s history that is providing the service to people, did not play against the determination of Nigerian people to increase their earnings. The representative stated that “No single government can stop an idea whose time has come to a generation who have added to the GDP [gross domestic product] of the internet.”
There were several political actions or announcements that affected the current bitcoin situation in the country. After the order was imposed, the Nigerian Senate started stating that there were threats to the nation’s economy and security due to the crypto-market. Before the decision, there was a full report made about the role of cryptocurrencies in money laundering, terrorism financing, illicit arms purchases, and tax evasion.
Many officials made comments to hinder the involvement of people in the crypto-industry, stating that crypto is not real money that is not created or backed by any Central Bank. however, crypto-supporters were not happy with these announcements.
Finally, to sum up, it is no surprise that a lot of countries have their own attitudes towards crypto and Nigeria is not an exception in this case too. It is a very common assumption that countries with advanced technologies and high living standards are more likely to become crypto-supporters than those who are undergoing a lot of problems in this regard. As we have seen from the article, Nigeria’s case is similar to many other countries, for example, India, which was involved in the industry very actively and the popularity of bitcoin was immense, however, several years later the government tried to get its hands on it and regulate the market. One of the reasons for that was that they were not able to track the transaction process and where the money from the country was going which could also work against the country’s economy.