- The Central Bank of Nigeria (CBN) has said that its decision to ban cryptocurrency was necessary to prevent crimes and mitigate risks
- Several Nigerians have condemned the move and believe the ban has some political undertone beyond those stated reasonings
- The Senate of Nigeria has summoned the CBN governor to explain the decision to ban cryptocurrency.
In a move that sparked outrage on social media earlier this month, the CBN issued a reminder to regulated financial institutions in the country that a 2017 regulation prohibits them from dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges.
Following the outrage that greeted the incident, the CBN released a press statement that explained the rationale for its reminder. According to the statement from Acting Director of Corporate Communications Osita Nwanisobi, banning cryptocurrency facilitation is necessary because they are used to commit crimes. It specifically mentioned terrorism and money laundering as crimes perpetrated with cryptocurrency. It also made reference to the Silk Road, the darknet site where cryptocurrency was used to buy drugs and other illicit goods.
CBN’s Reasoning For Banning Cryptocurrency
The CBN also claimed in its statement that the ban was necessary because of the risks involved in the speculative market, saying Nigerians must be protected.
However, several young Nigerians believe this ban to be a consequence of the End SARS protests. The protests were part of a massive campaign in November 2020 against police brutality in the country. The protest started as a hashtag on social media, but soon developed into in-person protests that shut several cities down for days.
As part of the moves to stop the protests, the CBN directed banks to freeze the accounts of individuals associated with the protest. This was likely done with the belief that if funding was cut, the protests will stop.
But this move failed to work, as…