CBN believe that cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion following directive to banks to close accounts related to cryptocurrency exchanges
It is also important to highlight that there is a critical difference between a Central Bank issued Digital Currency and cryptocurrencies. As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities
The following are reasons why CNB bank Cryptocurrencies in Nigeria
1. The use of cryptocurrencies in Nigeria are a direct contravention of existing law.
2. . Many banks and investors who place a high value on reputation have been turned off from cryptocurrencies because of the damaging effects of the widespread use of cryptocurrencies for illegal activities.
3. The role of cryptocurrencies in the purchase of hard and illegal drugs on the darknet website called “Silk Road” is well known. They have also been recent reports that cryptocurrencies have been used to finance terror plots, further damaging its image as a legitimate means of exchange.
4. Repeated and recent evidence now suggests that some cryptocurrencies have become more widely used as speculative assets rather than as means of payment, thus explaining the significant volatility and variability in their prices.”
5. Also, do not forget that cryptocurrency traders/investors do not pay taxes, therefore, federal government doesn’t generates income from it, yet it keeps hurting its strategies and economic recovering plan as well with productivity at large.
6. cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion.
However, former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has criticized the decision in an interview on Channels Tv Sunday Politics.
He said, despite risks involved in trading in cryptocurrencies, he would not recommend that crypto be banned outrightly because it is fast becoming a real factor in Nigeria’s investment ecosystem and livelihood of many Nigerians.
Moghalu advised the government to make the investment climate more favourable and friendly to enable foreign investment, since over “$500 million worth of Bitcoin has been traded in Nigeria within the last five years, and Nigeria is one of the top 10 countries in the use of cryptocurrencies in the world today.”