Many Nigerians who want to invest in Bitcoin wonder what the law of the land says about Bitcoin as a currency. People who want to use Bitcoin as a means of sending money abroad or for purchases also worry whether they are committing a crime.
This is largely because many governments around the world have outrightly banned cryptocurrency use as it can be a tool for criminals as a form of payment for illegal goods and services. Cryptocurrencies are used by these individuals because transactions are anonymous and not tied to identities as opposed to bank transfers or mobile money.
CBN’s stance on Bitcoin in Nigeria
In 2015, the Central Bank of Nigeria issued a circular warning Nigerians about buying Bitcoin as it can be volatile and unsteady. The circular also said the CBN is not responsible for managing or controlling the price of Bitcoin and other cryptocurrency. As the central body of the country’s economy it is the Central Bank’s duty to raise awareness about any form of tender circulating within its jurisdiction. It could also be the body’s duty to control such tender for inflation and other economic activities depending on the constitution.
CBN bringing together crypto enthusiasts
In January this year, the CBN warned banks in a circular and other local financial institutions not to trade in Bitcoin and it will be at their own risk.
By middle of the year we saw the CBN host events for Cryptocurrency enthusiasts from all over the country. This was to discuss how Blockchain can be use in several aspects of government and in governance. Especially with regards to the blockchain as a ledger which can be used to fight corruption. It’s important to remember that earlier in the current Buhari administration, the CBN had tied all federal agency and ministry accounts into one account for easy tracking of funds and in the administration’s fight against corruption.
CBN Building a Federal Reserve on Blockchain Technology
After this event, the CBN announced that intended to place the federal reserve on Blockchain technology. This will enable the bank, government officials and anyone else view how money is moving across the treasury account, what it is used for, who is collecting it and where each transaction is headed.
In August the CBN announced that an agreement was reached to adopt the use of Blockchain and cryptocurrency. According to Proshare, the Fintech Association of Nigeria has confirmed this move and is waiting on a framework from the regulatory body.
Bitcoin Trading is not Illegal in Nigeria
Despite earlier warnings and reservations by the CBN, it is clear that it is not looking to ban Bitcoin, other cryptocurrency or shut down exchanges that trade them in Nigeria. Therefore, it does not look like buying or selling Bitcoin in Nigeria will be banned soon. Instead the government will take a regulatory approach.
Bitcoin Exchanges in Nigeria Verify Users
In a large part, the Central Bank has taken some sort of regulatory approach and ensured all exchanges verify each user as much as possible before purchase or sale of Bitcoin.
We will continue to keep you up-to-date with Bitcoin and blockchain announcements from the CBN