The notable time when cryptocurrency dealers faced a hurdle in Africa was in 2015 when the Central Bank of Kenya sent a memo to CEOs of commercial banks, other financial institutions, telling them that that crypto trading is largely untraceable, and anonymous, making them susceptible to abuse by criminals in money laundering and financing of terrorism.
Immediately, banks in Kenya stopped patronizing accounts of anyone who traded cryptos such as Bitcoin. Kenya’s Centra Bank vowed to deal with banks that fail to carry out its instructions.
Fast-forward to 2021, and we see Nigeria’s official relationship with crypto at the level it was in 2015 for Kenya. Crypto exchanges have moved their money from Nigerian banks, while banks are doing their best to close all crypto accounts that are located in the country.
Some think that cryptocurrencies are banned in Nigeria but it will be very hard to do that. For one to do that, the internet has to be shut. What banks are doing is to hinder exchanges like BuyCoins, Bundle, Luno, and others stop using them as vehicles for those trading cryptos.
There is a move by Nigerian cryptocurrency traders to diversify risks by opening operations in East Africa, adopting the peer to peer system. The peer-to-peer system of trading is also being explored in Nigeria at the moment. Probably, it will begin in a few weeks from now.
As could be seen in other parts of the world, when crypto transactions go-between exchangers and commercial banks, regulators are able to track what is being traded, and who is doing the trading. Bitcoin transactions have never been totally anonymous because exchanges had significant KYC requirements.
Other problems still need clarifications, such as the insinuation by some senators in Nigeria that cryptocurrencies are making the Naira lose more value. That also needs to be considered because stakeholders would only be glad to welcome something that will improve the Nigerian economy.