Based on a widely shared memo on social media, the country’s apex bank prohibits all financial institutions from supporting crypto-related transactions in an effort to stop the digital asset services. The bank explained that the risks associated with the investment class necessitated the ban.

This news could significantly prevent millions of Nigerian youths from actively earning a living through digital assets trading. Presently, some of the world’s significant trading volumes come from the West African country, primarily linked to its booming population. Prohibitions from Nigeria could push other African countries to follow suit due to the former’s extensive influence on the continent.

CBN bans crypto trading in Nigeria

The country’s central bank, the Central Bank of Nigeria, has reportedly banned crypto trading in Nigeria. The news, which broke out in the early hours of Friday, is currently causing some uproars on social media, especially from the younger generation. The circular, which the nation’s authorities shared, revealed its plans to eradicate crypto buying and spelling within its borders.

Some years ago, the CBN’s Director of Finance and Policy regulations, Kelvin Amigo, signed a memo that warned natives regarding virtual currency’s use while describing some ways the digital assets streamline criminal activities like terrorism. The director’s view is similar to another regulator’s view, Janet Yellen. She believes that digital assets aid terrorism financing and money laundering, leading to America’s proposal of a suitable regulatory framework.

After its 2017 warning, the country’s Banking Supervision Department has taken steps to stop altogether accounts associated with crypto trading, according to information shared on the circular. The apex bank allegedly ordered Deposit Money Banks, Non-Bank Financial Institutions, and Other Financial Institutions to put accounts associated with virtual currency to a close.

The financial institutions have been mandated to take the steps immediately or risk sanctions by the government. The memo explained that the new regulations are a further step from the previous warning the Central bank-issued against crypto trading or facilitating crypto payments.

Nigeria and India’s influence

Just some days from India’s debate concerning the prohibition of crypto-related activities came Nigeria’s Central bank’s order to financial institutions. Nigerians and Indians have been opened to crypto trading before the new proposals their respective governments now put in place.

The immediate prohibition in Nigeria is a concern for its citizens, who felt that the total eradication would hinder technological growth in the country. Many countries agree that regulating the platforms would reduce criminal activities linked to digital assets while still ensuring that blockchain technology improves.

Developed countries like America assure that new regulations would not impede digital asset growth but would create an ethical environment where authorities would not tolerate criminals activities. Some months ago, statistics showed that the country had wide crypto-related searches, showing a growing interest amongst Nigerians.

The new prohibition could kill the digital asset industry in Africa, especially since one of the biggest influencers prohibited its activities. Many platforms also shared the rising numbers of Nigerian-based crypto investors, showing that the asset is finally getting exposure in the African continent.

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