Godwin Emefiele, CBN governor

Anna Oboho

To avoid sanction sledge hammer from the Central Bank of Nigeria, major crypto currency dealers have started to comply with CBN’s directive banning trading in crypto currency by closing or moving their exchanges out of Nigeria.

The CBN had on Saturday directed Deposit Money Banks, Other Financial Institutions and Non-Bank Financial Institutions, local financial institutions, against having any transactions in crypto or facilitating payments for crypto exchanges.

Following the directive, one of the dealers, Binance, announced that it had disabled deposits to prevent more naira from coming in.

The exchange had advised customers to withdraw their deposits in a tweet on Saturday, saying, “Received notice from our channel partners that NGN deposits and withdrawals will be affected.

“Still confirming details on when/how. Please withdraw your NGN as early as possible to avoid potential channel issues.
“Will share more details as they become available.”

Other exchanges such as Quidax, Buycoins Africa and Bundle have also toed the path of Binance and shut down trading in Nigeria.

In essence, the new regulations mean that you will not be able to use a card from a Nigerian bank or any other financial institution in the country to process any transactions on a crypto exchange. In a nutshell, while virtual currencies remain legal, trading them through an exchange in Nigeria is near impossible.

The new rules also asks banks to identify “persons and or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.”

While some observers say CBN action is closely linked to the pressure on foreign exchange, others say the stock exchange was losing trade volumes to bitcoin exchanges.

On Saturday, Tosin Adeoti, an analyst said, “Let me hint you on how the Nigerian government has pushed its citizens to crypto through their incompetence.

“The volume of trade on the entire stock exchange yesterday was less than N6bn. On Binance, one of the popular crypto exchanges used by Nigerians, the volume of trade of BTC/NGN pair was more than N13bn.

“BTC is just one coin. There are several other coins.

“Again, Binance is just one exchange. Money flows to where it gets the best returns.”

Many Nigerians have reacted to the ban by saying it is not proper.

Among them are Hip hop maestro, David Adeleke, popularly known by his stage name, Davido, who said it was shocking that CBN announced the ban three days after he told his 8 million twitter followers that he was planning to start a crypto currency exchange.

Also, former vice president, Alhaji Atiku Abubakar advised the CBN to revisit the policy.

He noted that what the country needed now was job for the masses and the opening up of the economy following the announcement by the National Bureau of Statistics that foreign capital inflow into Nigeria was at a four-year low, reducing from $23.9bn in 2019 to $9.68bn in 2020.