The rate of adoption and transactions of cryptocurrency in Nigeria recorded a huge increase ever since 2020. Many youths especially in Nigeria came to the knowledge of cryptocurrency and blockchain technology and it's been a turnaround innovation for them looking at the lack of employment opportunities in the nation. On the other hand, banks and other centralized finance institutions have since recorded a decrease in the number of customers who lock of their funds with them only to receive a miserly 6-7% per annum.
Suffice me to say that innovations is never being liked because it makes the former obsolete. For instance, post offices initiators don't like electronic mailing (Email) system because it has robbed them of their jobs. So, we never expected the conventional banking system to like and adopt wholeheartedly cryptocurrency and blockchain technology although some do like the JP Morgan Chase Bank. Reason is simple; it threatens them and their services in general.
Before now, the transfer of money from one person to another required an intermediary system or a middleman and this middleman was the banks. But the advent of digital currencies has made banks somewhat useless in certain aspects. People no longer need banks to transfer funds or transact irrespective of the location disparity. Also, people no longer need to lock their funds in a fixed deposit account only to receive very low interest. Cryptocurrency has the changed the game in totality while also bringing with it lots of comfort and less procedures/ stress.
Hence, the banks feel threatened especially the Nigerian banks as they pulled out a stunt to hinder the involvements of banks in the country with cryptocurrency transactions. On February 5th 2020, the Central Bank of Nigeria gave a circular banning banks to cut ties with crypto exchanges. This then means that it will no longer be possible for Nigerians to deposit Naira on exchange accounts directly from their bank accounts. As of now, some exchanges have disabled Naira deposits and withdrawals. As a result, a lot of grievances have been shown by Nigerians concerning this act by the CBN.
Truth is, there are lots of other ways to still transact and get naira to accounts so, it only affects Nigerian traders in a very little way. The P2p cryptocurrency trading will consequently experience an increase as many people will now opt to using it. Although some persons misinterpreted the circular saying CBN banned cryptocurrency, this is false as cryptocurrency cannot be stopped by any nation. Nigeria government is only looking for a way to regulate the transaction of cryptocurrency and also taxing cryptocurrency exchanges.
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