5 Reasons Why Nigerian Crypto Traders Should Not Panic About CBN’s Directive
By Gideon Chukwuemeka Ogbonna
Dear Nigerian Crypto Trader,
The government is not your friend. You live in a country where the government would do all it takes to frustrate you and block every portal to wealth. If you understand this, you will not panic about the Central Bank’s directive prohibiting Nigerian financial institutions from engaging in crypto transactions.
Financial institutions like Flutterwave are already sending emails to their customers stating that they would no longer carry out cryptocurrency transactions.
But do not worry. Here are 5 reasons why you should be calm and remain the crypto investor that you are.
1. The government is fighting a lost battle: There is a reason the cryptocurrency ecosystem is a disruption. It puts power and wealth in the hands of the people. The government knows this. And na why body de pepper dem. (Don’t be surprised that Godwin Emefiele trades bitcoin.)
Although they are fighting a lost battle, you would be cheating yourself out of wealth if you subscribe to their panic.
2. Whales do not need banks: Those that should be affected greatly by Central Bank’s directive are whales — those crypto investors who deal with high volume transactions and transact directly with exchanges (like Binance) through their banks. But the good thing is that these whales do not need these exchange-bank transactions. They carry out their businesses over-the-counter (OTC).
In his book, The Life of a Nigerian Bitcoin Trader, Chris Ani, highlighted how high net-worth traders and investors move large sums of crypto assets without needing exchanges. And this leads to the next point.
3. The Central Bank can only flag accounts that move funds directly from exchanges to bank accounts and vice versa: In light of the Central Bank’s directive, the Nigerian cryptocurrency ecosystem is set to see an explosion in the P2P (peer-to-peer) market. P2P markets like the Nigerian Bitcoin Exchange already have hundreds of low and high net-worth investors who send and receive crypto assets through their wallet addresses, and then liquidate these assets through their personal accounts without using an exchange. What proof will the Central Bank have to flag such accounts?
4. This directive will spark more financial disruptions and innovations: Necessity, they say, births innovation. The cryptocurrency ecosystem is here to stay, not only globally but in Nigeria. The bloom and boom of the crypto space are independent of governments. Government attacks would only birth new systems that would resist these attacks.
5. The rest of the world is embracing cryptocurrency: US banks are allowed to hold cryptocurrencies. Ukraine plans to build bitcoin mining farms. People of influence like Elon Musk and social media communities like TikTok endorse cryptocurrencies (e.g. DOGE). So, the question is: If Nigeria can fight her crypto investors, can she fight the world? For how long would she keep up with this fight seeing that the world is fast leaving her behind?
Dear crypto trader,
Do not be afraid.
Do not panic.
You are in a resilient industry.
Attacks will come.
But the fight had already been won long before it started.
So trade carefully.
Manage your risks.
And anticipate the moon.