Nigeria's Central Bank Explains Its 2021 Ban on Cryptocurrency Transactions at Banks (thenationonlineng.net) 31
In 2020 Nigeria had the third-most cryptocurrency transactions in the world (behind the U.S. and Russia). But "Nigeria's history with crypto has been a bittersweet one where the citizens have embraced digital assets with open arms but the government remains vehemently against it," writes the site Bitcoinist.
In early 2021 the BBC reported that "In an effort to regulate the market, Nigeria's central bank banned banks from facilitating cryptocurrency-related transactions in 2017, but the ban remained largely unenforced. However, this year the institution doubled down on its stance." In a statement released on 7 February [2021] it cited the need to protect the general public and safeguard the country from potential threats posed by "unknown and unregulated entities" that are "well-suited for conducting many illegal activities". Since then, many Nigerians have reported that their bank accounts have been frozen due to cryptocurrency-related activity...
However many investors with the possibility say they will continue to trade using their overseas bank accounts. They say they can easily revert to peer-to-peer transactions. This means that rather than transferring funds between a financial institution and a cryptocurrency online trading platform, investors transfer funds directly to each other or through a middle person as they buy and sell. This is the method the cryptocurrency community used before the development of the virtual currency marketplace ecosystem in Nigeria...
At the heart of the rise of Bitcoin is a distrust of centralised financial systems and top-down economic control, investors say. Many express their frustrations with government policy and the decline of the Nigerian economy.
This week the Lagos-based Nigerian newspaper The Nation published this explanation of that crackdown from the Central Bank's deputy governor, Kinsley Obiora. "When the central bank started reacting to COVID with what we call printing money and responding to the crisis, a lot of people in the private sector felt that printing of money could lead to hyper-inflation and these private sector people decided to respond by creating cryptocurrencies." Over time, the creators of cryptocurrency, he added, felt that central banks should not be left with the authority to do whatever they like with money. Fearing that such a mindset might cause inflation and reduce the purchasing power of households, the CBN he said responded to what he called "the good aspect of that change because a lot of people actually took to crypto currencies". Fed up with the antics of the cryptocurrency operators, Obiora said the "we kicked them out of our banking system because the opacity of the system is still a threat to financial system stability".
In early 2021 the BBC reported that "In an effort to regulate the market, Nigeria's central bank banned banks from facilitating cryptocurrency-related transactions in 2017, but the ban remained largely unenforced. However, this year the institution doubled down on its stance." In a statement released on 7 February [2021] it cited the need to protect the general public and safeguard the country from potential threats posed by "unknown and unregulated entities" that are "well-suited for conducting many illegal activities". Since then, many Nigerians have reported that their bank accounts have been frozen due to cryptocurrency-related activity...
However many investors with the possibility say they will continue to trade using their overseas bank accounts. They say they can easily revert to peer-to-peer transactions. This means that rather than transferring funds between a financial institution and a cryptocurrency online trading platform, investors transfer funds directly to each other or through a middle person as they buy and sell. This is the method the cryptocurrency community used before the development of the virtual currency marketplace ecosystem in Nigeria...
At the heart of the rise of Bitcoin is a distrust of centralised financial systems and top-down economic control, investors say. Many express their frustrations with government policy and the decline of the Nigerian economy.
This week the Lagos-based Nigerian newspaper The Nation published this explanation of that crackdown from the Central Bank's deputy governor, Kinsley Obiora. "When the central bank started reacting to COVID with what we call printing money and responding to the crisis, a lot of people in the private sector felt that printing of money could lead to hyper-inflation and these private sector people decided to respond by creating cryptocurrencies." Over time, the creators of cryptocurrency, he added, felt that central banks should not be left with the authority to do whatever they like with money. Fearing that such a mindset might cause inflation and reduce the purchasing power of households, the CBN he said responded to what he called "the good aspect of that change because a lot of people actually took to crypto currencies". Fed up with the antics of the cryptocurrency operators, Obiora said the "we kicked them out of our banking system because the opacity of the system is still a threat to financial system stability".
Top down (Score:3, Interesting)
Re: (Score:1)
telling their brothers and friends that no, it wasn't cool that they could get wealthy just by telling a lie or two
But it is cool. The honest workers are taking home a pittance in pay. The scammers are getting rich by comparison. There is no down side, so they continue. Peer pressure may not work, since the scammers can just go find friends among each other.
If the government can create a down side, by seizing bank accounts of people who trade crypto, perhaps people will be persuaded to switch to an honest career.
Bitcoin is a hedge against loss of freedom (Score:1)
I still do not now any crypto myself, because I consider the market too highly manipulated (or at the very least, manipulatable).
However I do still see value in Bitcoin from the standpoint of it's a currency you can use without interference.
Yes governments can make trouble at the edges but I don't think it's something they can eliminate at this point. People can always trade between each other, or exchange for physical goods and services all without ever being turned into "real" currency.
There will come a
No it is not (Score:5, Insightful)
Bitcoin and cryptocurrency in general centralized the same way all markets inevitably do as the winners use their winnings to consolidate power. You normally counteract that with democratically run governments and regulations put in place by those governments. As other people smarter than me have put it cryptocurrency is just speed running the last 200 years of finance history.
Re: (Score:3)
rsilvergun is correct. Your argument is focused on the use of 'Large governments' as an edge case, unlikely, when:
0. Large governments are already manipulating everything they can, and enlisting corporations to assist. Look up the literal definition of fascism.
1. Bitcoin and most blockchain crypto systems permit a 51% attack to succeed, they are majority-compliant systems. Ultimately cryptocurrencies will give way to crypto-based fiat currencies. What's the confirmation time of Bitcoin today? Seconds? Block
Re: (Score:2)
Block chains are a cool idea to make a database that you can know the history of authoritatively, but I'm not sure they have a practical use. Maybe for some kind of gov't record keeping application, but even then I'm not sure we need them as existing processes seem to
Re: No it is not (Score:2)
Maybe so. Blockchain tech has some utility, and if you're able to accept the overhead implicit in proof-of-work or proof-of-stake reconciliation they can be useful payment methods. But a Bitcoin vending machine is sort of a stupid idea today. Something that can preserve activity seems to be useful for electric currency, though today a paper dollar is a lot like a book. I can give it away, lend it, read it over and over. No one else then my partners in transactions really knows what happened. Deposits turn i
Re: No it is not (Score:2)
You assume that exchanges know who mining pool operators are. And if they do, guess what? If they strong arm a mining pool, they can just transfer funds around on the blockchain, or give it to their friend Stan that has a completely clean identity that isn't connected to a mining pool.
Um... we do. (Score:2)
Hyperinflation koan (Score:1, Interesting)
What is more hyperinflationary: central banks creating currency out of thin air, or people creating cryptocurrencies out of thin air?
Value of money (Score:5, Funny)
Since the government is devaluing my country's currency, I will create my own currency, which has no value at all. Surely something might go wrong with this plan?
Value is defined by what people are paying (Score:1)
Since the government is devaluing my country's currency, I will create my own currency, which has no value at all. Surely something might go wrong with this plan?
Except that's not what is happening. Just as places with high inflation often switch to using USD or other currencies which are more stable, in Nigera a lot of people have decided that it's even easier to get BTC than it is to get physical US currency, which if you think about it is probably true as where would they get a constant supply of physic
Re: Value is defined by what people are paying (Score:2)
Re: (Score:1)
The article said that "people in the private sector" were "creating cryptocurrencies", not that they were adopting BTC.
Sure, but come-on - most of the popular crypto currencies are basically echos of BTC value.
And what I said applies equally to other crypto like ETH.
And of note is the the article in that spot was speaking about the world at large, not just Nigeria.
419s aren't compatible with cryptocurrency (Score:2)
Banks don't take Bitcoin to pay for fees to unlock an account, so a Nigerian prince asking you for Bitcoin to get a share of their father's fortune would sound extremely suspicious.
I'm guessing Nigeria is banning crypto to protect the cottage industry.
Hey Oblora, where is my money? (Score:5, Funny)
The statement from the Prince himself (Score:3)
Listen, I know you have been contacted by my peoples (note the s) to send money or whatever. But I have come forward in person to let the whole world know that those requests are legit, that I am still held captive, but we I mean my captors, can now accept crypto as well. Keep them coming (did I have to add that last one
Unregulated Currency Is Bad (Score:3)
When I use a currency...I need to know it's backed by something...even if that's just the worthless promise of a government. Crypto does not offer that. The crypto I have today could be useless tomorrow. It's monopoly money. I used to have customers try to pay me in crypto and my response was "I'm sorry. I only accept legal currency. I can't pay my bills in crypt. I can't buy much in crypto. And this $500 worth of crypto could be worth $5 tomorrow."
The next wave of fucking employees will be employers paying in a crypto that will change value almost daily and ensure they get paid even less. "It was worth your paycheck when I gave it to you" while you try to figure out how to feed yourself and your family with something that's worthless.
Re: Unregulated Currency Is Bad (Score:2)
Re: Unregulated Currency Is Bad (Score:2)
It is backed by something stronger than government's wimpy promise. It's backed by individual people's greed, distributed in many different countries.
Re: (Score:2)
I'll take nukes and proven willingness to use them, thanks.
Stopping the Nigerian Prince Before He Can Crypto (Score:2)
Easy answer (Score:2)