Nigeria, Central Bank calls for immediate closure of all encrypted accounts in the country

(Cio Mag) – A radical measure taken by the Central Bank of Nigeria (CBN) at the moment when Elon Musk, Tesla’s boss announced yesterday, February 8, 2021, that it had invested 1.5 billion dollars in Bitcoins. This announcement pushed the price of Bitcoin to a historically high level, reaching nearly 40,000 euros today. An all-time high that has shaken Africa’s leading economic power.

Third largest holder of Bitcoin reserves in the world as a percentage of GDP, behind Russia and New Zealand, according to a report published in December by the American bank Citigroup, Nigeria is among the leading « aficionados » of this new electronic currency. This renewed interest is frightening for local authorities.

The lack of regulation thanks to the block circuit and the freedom of a decentralized system offered by its use are all arguments that are fuelling its success in Nigeria, which somewhere excludes exchange systems. Despite its growing success in a country that is marginalized by the international financial system, exchanges with cryptomoney continue to divide the oil country of 190 million inhabitants.

Darknet, tax evasion, financing of terrorism

A firm position that the monetary issuing institution has justified in a communication. Continuing to ban this new form of currency, the Nigerian financial institution presents it as « encrypted, opaque, unsupervisable and therefore unsettled tools, digital currencies are considered to pose too great a risk to the national financial ecosystem ». The Central Bank of Nigeria cites risks such as « loss of investments, money laundering, financing of terrorism, illicit flow of funds and criminal activities » and « tax evasion » as some of the risks hitting the country hard.

« For all these reasons, the CBN cannot for the time being accommodate cryptomoney and will continue to do everything within its regulatory powers to educate Nigerians to renounce its use and to protect our financial system from the activities of fraudsters, » the institution argues.

In the meantime, it would be difficult to try to control or ban this new form of currency, which is presented as a gamble for the future. In the coming years, cryptomoney could expand rapidly in other African countries to peg the local champions of mobile money to a global system.

Nigeria, Central Bank calls for immediate closure of all encrypted accounts in the country
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