The Central Bank of Nigeria (CBN) governor said that cryptocurrencies would be legal again in the country as it is working hard to stop them from being used to finance illicit activities.
Cryptos will soon be legal in Nigeria
Nigeria is one of the largest Bitcoin markets in the world. However, the CBN banned banks and other financial institutions from providing services to cryptocurrency companies and investors. However, the CBN governor said they might soon reverse the decision as the central bank is working hard to ensure people don’t use cryptocurrencies to finance illicit activities.
The CBN Governor Godwin Emefiele revealed this while speaking at the 279th meeting of the Monetary Policy Committee in Abuja. Emefiele said he is confident cryptocurrencies like Bitcoin will be legal in Nigeria again. He didn’t give a timeline for reversing its ban but said the central bank has been investigating the sector.
The governor said:
Nigeria was the second-largest Bitcoin market in the world, behind the United States. However, this changed following the CBN’s ban in February. Emefiele explained that the central bank issued the ban to prevent crypto from being used to finance illegal activities. “We found out that a substantial percentage of our people are getting involved in cryptocurrency, which is not the best. Don’t get me wrong, some may be legitimate, but most are illegitimate,” he added.
The governor previously said Nigerians are free to trade cryptocurrencies. However, the banks are not allowed to provide services to crypto entities.
Nigerians remain active in the cryptocurrency space
The adoption of cryptocurrencies in Nigeria continued despite the CBN banning financial institutions from providing services to crypto companies. Nigerians turned to peer-to-peer platforms like Paxful and LocalBitcoins. The introduction of the P2P feature on Binance also helped Nigerians enter the cryptocurrency market. According to Paxful, Nigeria’s crypto traded volume on its platform surpassed $1.5 billion in the first four months of the year. According to Paxful, Nigeria is ranked second only to the US in trading volume.
Nigerians have turned to cryptocurrencies to preserve their wealth due to the massive inflation that has affected the economy in recent years. The Naira has been devalued multiple times over the past few years, and residents believe the CBN would do it again.