The hue and cry against crypto crackdown implemented by Central Bank of Nigeria not only caught the public eye internationally but also got the attention of worldwide governments. Opens up a new debate, “how to regulate crypto, particularly Bitcoin, without jeopardizing innovation?”
Back in February, when the Central Bank of Nigeria (CBN) imposed a crypto crackdown, it caught the public eye within and outside Nigeria.
The crackdown was carried out on the basis of notoriously famous crypto directives which were initially framed by CBN in 2017. Through the directives, CBN asked financial institutions to suspend banking facilities towards crypto trading exchanges. In addition, the banks were directed to ensure closure of their bank accounts forthwith.
The directives sparked massive protests from within and outside Nigeria.
As compared with other African countries, Nigeria’s economy is considered more stable and strongest within Africa. In addition, when it comes to crypto trading, Nigeria is at the top of all African countries. In fact, it is better than many Asian, Middle Eastern as well as a few European countries in terms of crypto adoption.
One Nigerian financial expert, David Akinwale, told that when directives were issued, he came to know of them at his mobile handset. He said that he read the news when he was traveling in a bus going home. He explains that being a crypto trader himself, it was the most brutal news he had heard after a very long time. He felt disappointing and, at the same time, embarrassed to see that the Government machinery has been used to jeopardize innovation. He termed CBN’s directives as bringing “dark ages” upon Nigerians who were otherwise embracing Bitcoin and helping in its mass-scale adoption.
One of the higher officials of CBN namely Godwin Emefiele also made a public statement recently and tried to clarify the directives. He stated that the objective of the directives was not aimed at banning crypto trading. Instead, he stated that the purpose was to make sure that financial institutions are separated from executing and/or facilitating crypto transactions.
However, at that time, financial institutions were not made to stop banking services to exchanges, which is the rudest CBN had done now. In fact the 2017 directives were aimed at ensuring that the banks should comply with AML and KYC policies and nothing above that.
But these days actions of CBN and Nigerian Government has ignited a worldwide debate, where governments are considering crypto regulation.
The present-day dilemma amongst many countries of the world is how they can regulate Bitcoin/crypto without jeopardizing the innovation. In such countries, the US is at the top and after US there are countries such as China, India, Russia, France, Iran etc.
Does crypto regulation really mean jeopardizing the innovation?