By Bukola Idowu
Lagos — Despite restrictions on trading in cryptocurrencies in the country, Nigerians appear to have found new ways to continue buying and selling them.
LEADERSHIP findings revealed that weekly traded volume of bitcoin in the country rose to N1.13billion in the first week of March, 2020.
Data by Coindance, a bitcoin trade monitoring site, showed that Nigeria’s traded volume increased by over N130million to N1.13billion last week compared to N1billion traded volume recorded in the week ended February 27.
On February 5, 2021, the Central Bank of Nigeria (CBN) had directed that banks and financial institutions in Nigeria should close the accounts of persons found trading in cryptocurrency in the country.
The apex bank stood its ground despite the intervention of stakeholders in the financial technology world who urged the Nigerian government to consider embracing it.
In spite of this, trading in cryptocurrencies resumed after the initial shock and panic sell off.
On cryptocurrency trading exchanges such as Luno and Binance, there are no options for naira payments and Nigerian traders are encouraged to continue trading using peer to peer (P2P).
The increase in volume may also not be unconnected with the volatility in the price of bitcoin, the most popular of the cryptocurrencies in recent times.
After soaring above $55,000 early last month, the price of bitcoin dipped below $46,000 within a few days before picking up again.
As of Monday, the price of the cryptocurrency had crossed the $50,000 mark.
Weekly traded volume in January this year which had been within the N1billion mark soared to N1.25billion in the week ended February 6, 2021 when the CBN announced the restrictions before dipping in the last week of February.
The apex bank had directed that banks freeze accounts of persons found trading in cryptocurrency, a policy that has received backlash from many stakeholders.
The position of the CBN had been backed by the Nigeria Deposit Insurance Corporation (NDIC), the Securities and Exchange Commission (SEC), the Nigeria Financial Intelligence Unit (NFIU) as well as other agencies in the financial industry which maintained that trading in cryptocurrencies will not be allowed in the country.
According to CBN, the move was to protect the funds of Nigerians and stop it from being used as a means of illicit transactions.
The banking sector regulator, in a statement, had said due to the lack of transparency, “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.”
This stance of the CBN was given more credence after the United States Treasury Secretary, Janet Yellen, warned that bitcoin is an ‘extremely inefficient’ way to conduct monetary transactions.
Yellen, in an interview with CNBC, said there remain important questions about legitimacy and stability.
But Nigeria’s vice president, Yemi Osinbajo, said instead of adopting a policy that prohibits cryptocurrency operations in the country, the country “must act with knowledge and not fear” and develop a robust regulatory regime that is thoughtful and knowledge-based.