Is the legalization of cryptomoney in some countries simply unthinkable? Nigeria’s central bank is giving Binance a hard time. The latter is temporarily suspending its deposits in Nigerian Naira; there is no indication that the situation will be unblocked in the future.
Cryptos non grata in Nigeria
Following the letter of the Central Bank of Nigeria of February 5, 2021, Binance has temporarily suspended deposits in Nigerian Naira.
Binance announced that its Nigerian Naira payment partners have suspended deposit services until further notice on February 5, 2021 at 7:00 pm local time (GMT+1).
The Central Bank of Nigeria had ordered local banks to identify and close all accounts linked to cryptographic platforms or operations.
It had told the local banks that trading in cryptos or facilitating payments for the exchange of cryptos was prohibited under a 2017 circular, stating that Bitcoin and other cryptos were not legal tender in the country.
This measure would not have impacted the P2P platforms on which most of the country’s cryptographic exchanges take place.
Risk Management Champions
Can cryptomoney really contribute to Africa’s development by promoting financial inclusion? The example of Nigeria is not an isolated case.
Although there is currently a legal void on cryptomoney in African countries, this void could be replaced by prohibitions rather than a regulatory framework that allows but protects cryptophiles.
African central banks are praising prudential measures, which are supposed to protect the country’s economy from bankruptcy – which is totally ridiculous given that the structural problem of their development is one of governance with widespread corruption, with public funds dedicated to key sectors such as education being diverted for political purposes and to defend the interests of a minority.
Excellent » risk management does not necessarily go in the direction of a country’s development – going back to the very basis of the risk-return nexus.
Even PayPal cannot yet offer its services for receiving fiat funds on its platform to African countries because of their legal environment. So what is the likelihood that such innovative services as crypto-exchange will be accepted by the regulatory authorities of these countries? Africa is already lagging behind the rest of the world in terms of development; the gap is likely to widen even further because several countries on the continent could miss the turn of the cryptomoney era because of the « wisdom of their governments and central banks ».
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