Nigeria Central Bank Declares War on Bitcoin in a Losing Battle With the People
Written by Sylvain Saurel
In the Western world, Bitcoin is mainly seen as a tremendous store of value. An incredible tool to fight the great monetary inflation that the world's major central banks' aggressive monetary policies are putting us through.
This makes some people say that Bitcoin has already failed in its mission to become a mainstream means of payment.
These people should take a step back and look at what is happening elsewhere in the world. If they did, they would see that the adoption of Bitcoin as a means of payment for everyday life is growing steadily in emerging and authoritarian countries.
Bitcoin is already an everyday means of payment in many countries
I already told you about the situation in Morocco some time ago. Despite the complete ban on the use of Bitcoin and cryptocurrencies since 2017, Moroccan citizens continue to embrace the Bitcoin revolution.
P2P trading volumes on the Bitcoin network continue to grow in Morocco. Citizens simply need Bitcoin daily.
Not far from Morocco is Nigeria, which ranks among the countries with the highest volumes of P2P exchanges in the world with Bitcoin. This reflects several realities for Nigerian citizens.
The first is Nigeria’s difficult economic situation. The second is the devaluation of the local currency, the naira. With no easy access to the U.S. dollar, Nigerians are turning to Bitcoin.
Bitcoin allows Nigerians to protect themselves from the economic mismanagement of often corrupt political leaders. Bitcoin protects them from both monetary inflation and the risk of censorship.
The Central Bank of Nigeria wants to tighten controls on the Bitcoin ban
This risk increased further in February 2021 when the Central Bank of Nigeria (CBN) reminded people that Bitcoin and cryptocurrencies are illegal in the country. The ban dates back to 2017, but until now, few sanctions had been taken against citizens using Bitcoin.
The current success of Bitcoin in Nigeria is now such that the Central Bank of Nigeria has asked commercial banks to “identify individuals and entities” transacting to cryptocurrency exchange platforms to close their bank accounts immediately.
This puts Nigerian citizens at risk when they want to exchange their BTC and other altcoins tokens for naira. Such transactions to repatriate fiat money to their bank accounts could mean the immediate closure of their bank accounts.
In the past five years, Nigeria has traded over $566 million worth of Bitcoin on the Paxful platform. This trading volume puts Nigeria just behind the world leader on this platform, the United States.
Nigeria’s citizens cannot do without Bitcoin, which is already a plan A for many of them
While the CBN plans to be uncompromising from now on, the people have plenty of reasons to continue to embrace Bitcoin regardless. In February 2021, inflation reached 17.33% in the country. This figure is all the more worrying as it is the highest it has been in 4 years.
One U.S. dollar now trades for 480 nairas. While the Central Bank of Nigeria maintains an artificial exchange rate of 1 dollar for 380 nairas on the official market, no one in Nigeria is fooled.
While the use of Bitcoin for drug trafficking or money laundering does exist in Nigeria, as it does everywhere else in the world, it represents only a tiny portion of the ever-increasing Bitcoin trading volumes in Nigeria. The government is trying to fight Bitcoin when it goes against common sense.
The Central Bank of Nigeria engages in a losing battle with the people
The battle that the Central Bank of Nigeria has embarked on is a losing one.
People cannot give up on Bitcoin, because it is already their best option in every way. Bitcoin makes it easy for them to make everyday payments while protecting their wealth. Exchanges can be made via Telegram or WhatsApp to avoid possible checks by the Central Bank of Nigeria.
Payment in fiat currency is then made via a simple bank transfer so that no mention is made of the cryptocurrency transaction.
Merchants also see Bitcoin as an incredible tool for trading across borders while avoiding some exorbitant taxes. As the most populous country in Africa, Nigeria also has a strong diaspora around the world. Nigerians simply want to use the most convenient and advantageous system for their commercial or personal exchanges.
Bitcoin is the most convenient system right now.
Final Thoughts
We will see how the situation evolves, but I am certain that the battle that the Central Bank of Nigeria has embarked on cannot be won. You can’t stop a revolution like Bitcoin that meets the expectations of an entire people.
It is all the more difficult when the political powers that be in a country like Nigeria are not able to offer Nigerians a real alternative.
The attempt to ban Bitcoin will only strengthen its existence and use. This is already happening elsewhere in the world when governments ban Bitcoin and tighten controls on its use.
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Bitcoin always wins.