The 5th of February 2021 brought about unrest for the crypto enthusiasts in Nigeria.
This is following the news that filtered into the internet about the ban of crypto trading in Nigeria.
Now you might be wondering why this is such a big deal. I will tell you.
Nigeria is among the top leading African countries on crypto and crypto adoption has continued to increase by the day.
Hence, the whole dust being raised by cryptonites.
But did the CBN really ban crypto?
Well… You will get the answer to that question as we continue in the next subheading.
CBN Crypto Ban Circular: Did They Really Ban Crypto Trading?
On 5th February 2021, the Central Bank of Nigeria (CBN) published a circular(image above).
The circular was addressed to banks and various financial institutions reminding them that dealing or facilitating payments for cryptocurrency exchanges is prohibited.
It further directed them to close down any account that is connected with crypto trading.
But does this really mean that you can no longer trade crypto in Nigeria?
The CBN or any government at all cannot ban crypto. They cannot do this because no one owns the blockchain.
So, how does this ban affect crypto traders in Nigeria?
It simply infers that crypto traders in Nigeria may not be able to make payments to exchanges directly from Nigerian banks.
This is so because the transactions can easily be traced to the exchanges and the account of the trader will be closed.
So what are the exchanges saying about this?
Some of the affected crypto exchanges and services have paused NGN deposits but still allows withdrawals which they warned will take a lot of time.
This is because withdrawals will now be processed manually as the ban also affected payment processors like Flutterwave and others.
A smaller percentage have delisted NGN pairs on their platform.
But in all these, what are Nigerian crypto traders to do?
Will they still be able to carry out transactions in NGN or is it the end of the road for them?
Find out in the next section.
The Way Forward: What Nigerian Crypto Traders Should Be Doing
There are still ways crypto traders can still get access to trade with their NGN.
But in all these ways, one needs to apply caution while using them.
1. Peer-to-Peer Exchanges
P2P exchanges are platforms that allow you to trade with others but moderates the trade using an escrow system.
So what happens here is this:
Buyer A wants to buy some BTC. He goes on to a P2P platform and finds Seller A.
He initiates the trade and the platform holds Seller A’s BTC in its escrow.
Buyer A then makes payment in fiat(NGN) to Seller A’s bank account.
When Seller A confirms payment, the platform then releases the BTC to Buyer A.
So this way, Buyer A is still able to trade with his fiat(NGN) comfortably.
Examples of reputable P2P exchanges include:
- Remitano (Visit Site) (Read Review)
- Binance (Visit Site) (Read Review)
- Paxful (Visit Site) (Read Review)
- Blockvila (Visit Site) (Read Review)
- Redeeem (Visit Site) (Read Review)
- LocalBitcoins (Visit Site) (Read Review)
- Coincola (Visit Site) (Read Review)
- CryptoLocally (Visit Site) (Read Review)
- InstaShift (Visit Site) (Read Review)
- Coindirect (Visit Site) (Read Review)
Let’s see another way one can still use NGN to trade despite the CBN ban.
2. The Use of NGNT
Simply put, NGNT (Nigerian Naira Token) means Naira in a tokenized form.
It is a fiat-backed stable coin pegged to the Nigerian naira on a 1:1 ratio (i.e. 1NGNT equals 1NGN ).
NGNT has 2 major issuers:
There are also exchanges where you can buy NGNT e.g BuyCoins, Stellar DEX exchanges and wallets.
What one can do is to buy this NGNT from its issuers or if you own them already, you can then use it to trade in place of the NGN.
This way, you are still making use of your NGN but in a tokenized form.
Let’s go on to the concluding part to round up this post.
PS: If you want to learn how to trade cryptocurrencies profitably, we have created a perfect course to help you do that.
Enroll in our Cryptocurrency Mastery Course by going to www.ctmastery.com.
You can also join our Telegram community at https://t.me/ctmastery for more information.
Closing Thoughts on the CBN Crypto Ban
This is all I have for you the CBN Crypto Ban post.
Like I mentioned earlier, as you trade with these alternative means, let wisdom not be far from you.
Caution should be applied to avoid breaching the directive from the CBN.
We will keep our fingers crossed hoping that ‘this, too, shall pass’.
Be sure to hear from me again once there is any update on this matter.
For now, stay safe, stay vigilant, and share this post to help other traders know what to do at this point.