Nigeria’s Ban on Crypto Continues – Crypto Industry At the Brink of Collapse

Nigeria sticks to its decision of continuing nationwide ban on crypto trading. However, even after the ban crypto continued to be traded, though at a much higher rate. Particularly, Bitcoin reportedly swapped hands at US$ 76,000 while the worldwide rate was US$ 52,000. The Nigerian crypto industry fears colossal loss and inevitable collapse if the ban continued for long.

Nigeria is always regarded as one of the crypto-friendly countries worldwide. In Africa, Nigeria also enjoyed the status of being the top country in terms of mass adoption of cryptocurrencies and blockchain technology. However, a major upset has happened to the Nigerian crypto industry very recently.

It was informed by the ruling Nigerian Government in January that it has decided to impose a permanent ban on crypto trading. It then informed that the ban wouldn’t come into force immediately but a date was provided when it will be implemented with full force. 23rd February, 2021 was decided to be the end date when crypto trading was to be seen off permanently in Nigeria.

Meanwhile, the Government directed the banks to suspend all crypto relationships with exchanges and individuals from 5th February, 2021. This suspension of banks’ relationship resultantly decreased crypto trading at several crypto trading platforms. Thereafter, the premium on crypto trading, particularly Bitcoin trading, sparked enormously.

At that time, one of the Nigerian crypto trading platform’s CEO, ChiagozieIwu was asked about the sudden premium spike. Iwu, who was running day-to-day affairs of Niajacrypto, told that the exchanges in Nigeria had been charging different rates. Their charges for Bitcoin trading are separate as well as for other cryptocurrencies. The situation had erupted because digital assets had to be acquired a higher rates than the market.

Iwu further pointed out that before the ban, Nigerian crypto exchanges had consensus and were trading on the basis of unified rates. But when banks started to comply with Nigerian Central Bank’s directives, the liquidity condition worsened instantly. He stated that before the directives, crypto trading was as easy as pie where there were no market spreads. But thereafter a gap emerged between global and domestic exchanges which took Bitcoin’s value at exorbitant rates.

I explained further that the Nigerian crypto industry has come to the brink of collapse and exchanges are going to face colossal losses. He added that at this exchange alone, the deposits dropped by at least 80% when Nigerian Central Bank announced the ban.

It was reported that Bitcoin traded hands at the cost of US$ 76,000 as of 18th February, 2021. While the market rate was approximately US$ 52,000. This meant that Nigerians were forced to pay an extra 24 thousand dollars against a Bitcoin.

Even though the crypto industry made hue and cry yet the Government didn’t pay any heed and continues to hold the field to date.