With more calls for regulations by governments on cryptocurrencies across the globe rising and the value of Bitcoin still hovering around $7,500, Nigerians are cutting back on their investment in the digital currency.
From N1.476 billion average weekly trade on Bitcoin in the country in early February, trades have dropped to N1.33 billion by the end of last month according to data provided by Coin Dance, an online digital currency monitoring platform.
The Central Bank of Nigeria (CBN) along with the Nigeria Deposit Insurance Corporation (NDIC) had issued out statements warning Nigerians against investing in cryptocurrencies. They cautioned Nigerians to be wary of investments in cryptocurrency, stressing that virtual currencies are not legal tender in Nigeria.
The CBN reiterated that cryptocurrencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and Exchanges such as NairaEx were not licensed or regulated by the CBN.
The statement signed by the CBN’s acting director in charge of corporate communications, Isaac Okorafor, emphasized that dealers and investors in any kind of crypto currency in Nigeria were not protected by law, thus may be unable to seek legal redress in event of failure of the exchangers or collapse of the business.
The CBN therefore warned Nigerians against investing in cryptocurrency as doing so would be at their own risk.
It will be recalled that the CBN on January 12, 2017, issued a circular to Banks and other financial institutions on virtual currency operations in Nigeria.
In the 2017 circular signed by the director, Financial Policy and Regulation Department, Kevin Amugo, the CBN had among other issues noted that virtual currencies were traded in exchange platforms that are unregulated, all over the world. It further noted that transactions in virtual transactions in virtual currencies were largely untraceable and anonymous thereby making them susceptible to abuse by criminals, in money laundering and financing of terrorism.