Nigerian banks had received orders to close cryptocurrency-related accounts. The central bank of the African nation says that there are “illegitimate” uses of crypto assets.
The Central Bank of Nigeria (CBN) banned all transactions with Bitcoin (BTC) and other cryptocurrencies almost four months ago. However, the monetary authority decided to allow them now as a high percentage of Nigerians use digital assets. The governor of the institution, Godwin Emefiele, did not like having to admit that situation.
The institution is researching the use of cryptocurrencies in the country, according to the official. He said that the results that they have found so far indicate a high degree of adoption among the inhabitants. That fact influenced them to lift the ban that they had imposed in February.
“We have done our research and have found that a significant percentage of people are getting involved with cryptocurrencies. Do not get me wrong. Although some uses may be legitimate, I consider that most of them are illegitimate,” the governor told local media.
Cryptocurrencies Will Come to Life Even in Nigeria, Said Emefiele
At first, the governor of the CBN attacked Bitcoin and threatened to sanction banks that allowed cryptocurrency transactions. However, he later stated that crypto assets “will come to life even in Nigeria.”
The central bank’s decision will allow bank accounts to once again process transactions with cryptocurrencies. However, no one knows yet if the new position of the institution would encourage the adoption of Bitcoin as a means of payment or investment.
There Exists Volatility in the Cryptocurrency Market
The governor of the Central Bank of Nigeria also raised the issue of market volatility and how it is possible to manipulate prices. In this regard, he cited what recently happened in the cryptocurrency market because of Tesla CEO Elon Musk. He noted that the entrepreneur has taken different positions on Bitcoin and has shown his bias concerning the Dogecoin project.
Emefiele referred to Musk because the bank had banned cryptocurrencies just when Tesla reported that it had invested USD 1.5 billion in Bitcoin. Following this event, the asset’s price reached an all-time high of USD 64,000 in April.
Nigeria Has One of the Highest Levels of Crypto Adoption
Currently, Nigeria is one of the countries with the highest adoption of Bitcoin and other cryptocurrencies. According to research by the intelligence firm Chainalysis, the African nation ranks eighth in the world regarding the use of digital assets. It follows Ukraine, Russia, Venezuela, China, Kenya, the United States, and South Africa.
Nigeria has a high rate of inflation and its national fiat currency, the naira (NGN), is suffering devaluation. Those two reasons could be leading Nigerians to adopt Bitcoin as an alternative to safeguard value.
The number of people who are adopting and using cryptocurrencies in the world is increasing. Some countries implement increasingly strict regulations on decentralized cryptocurrencies but know that they are already part of the economic system.
By Alexander Salazar
