Nigerian Government vs The People: Operation Crypto Attack

By now I'm sure you've heard that the Central Bank of Nigeria banned cryptocurrencies. Funny thing, because I actually just talked about how they don't care about our silly internet money a few days ago. It turns out I'm the fool here because they actually do, and in fact, they hate it to the point of restricting trade in the country.

For what it's worth, nobody saw this coming and it actually contradicts the SEC's plan to regulate cryptocurrencies in Nigeria. However, to clarify some points about the "ban", crypto holders aren't in any direct risk. However, enablers, on the other hand, will face the "wrath of the government" by having their bank accounts closed.

The clampdown on cryptocurrency trading focuses on local companies that enable the purchase of this class of digital asset in Nigeria. This means OTC, and third party sites like Flutterwave who work with Binance are at risk.

The Significance

On the surface, one could say it is a war against cryptocurrency, but if you take a closer look, it is actually a "pro-Naira" movement.

A large volume of naira often finds its way to P2P and OTC exchanges to get dumped for Bitcoin, Ethereum, XRP or a couple other top ten cryptocurrencies.

The knock-on effect is that the Naira plummets against most assets, including USDT or any variant that is traded on the platform. This drop in value often makes it difficult for people to run local businesses in the country because we're very reliant on imported goods.

In some way, you could say it is a "good move" to help stifle the drop in Naira. Since the move, the Naira has gained against the dollar in the parallel market and Bitcoin in exchanges. However, just like everything else this government does, it is Draconian and shortsighted.

The FUD they're trying to peddle will only have a short term effect on the inevitable demise of the Naira because there are numerous back doors to circumvent their silly policies.

Doomed by design

Long before the advent of cryptocurrencies, the government had been doing a really fine job in devaluing the currency.

In the early 2000s, 1 dollar was equivalent to 180 naira. Fast forward to today and you'd be lucky if you get a dollar for less than 460(prior CBN FUD move, it was 490).

Many years of consistent mismanagement and taking loans for capital projects that don't generate funds(and even if it generates, only gets stolen) got us to the situation.

The real problem now is that, unlike before when the government were the only ones with the ability to rape the Naira at their will, ordinary people like me can participate and take our own piece of the pie.

Everything stays the same

A recent study showed that Nigeria, Africa's most populous nation ranked second in the volume of P2P trading for 2020. The number only accounts for on record transactions on exchanges; in reality, there's a lot more going on in terms of crypto and in the long run, not much will change.

Only two days ago, the government took yet another loan of $500m to fix our ailing power supply. It is a song I've heard a million times over.

The country is already neck-deep in debt as it is. During the pandemic, the CBN further devalued the currency to sort out debts and now we're back to where we started.

For us, cryptocurrency isn't an option, it is a necessity, as it is the one place we're sure that the government can't touch us.

The traditional financial system governed by the CBN with Naira as the tender of value is a liability. If you held 1000 Naira from 2015-2021, a time that coincides with this current government, the purchasing power for your money will have dropped by 50%.

The coconut head generation

So instead of relying on local exchanges, people will find ways to circumvent the silly laws and we'll still trade cryptocurrency.

In long run, the government still lose and all they've done now is sign the death warrant for an already crumbling system. When we were trading on local exchanges right under their nose, they could have tried to regulate it and even imposed a tax on gains. Instead, they picked the long way round.

In a country that suffers from lack of literally all the basic amenities and absolutely horrible documentation culture, there's no chance of stopping the impending demise of the Naira.

The events of the ENDSARS protests that led to violence perpetrated by this the government undoubtedly has them spooked. The average youth and the government are like two enemies forced to live in the same room.

The people in power have shown their hands, and their unwillingness to adapt to the requirements of the modern Nigerian has sadly gotten to a point of no return. As far as I'm concerned, nothing good can come out of a government that kills its people.

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