Amazing! Nigerians Expand Crypto Trading After CBN Ban

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After the ban on cryptocurrencies transactions by the Central Bank of Nigeria (CBN) on 5 February, 2021 crypto transactions soared to higher volumes than was seen pre-ban.

In March, just after the CBN action, the volume of cryptocurrencies sent from Nigeria rose to $132 million, up 17% from the previous month, research firm Chainalysis said. Transactions in June were 25% above the same month last year.

A similar thing happened recently when news circulated that the National Film and Video Censors Board (NFVCB) has removed Disney’s latest movie – The Eternals – from cinema schedule allegedly over a same-sex kissing scene. Nigerians took to Twitter – another victim of a ban that continues to enjoy the patronage of Nigerians regardless – to express their grievance. Pondering what the point of the ban is considering, the movie will get to its audiences one way or another, some pundits marveled at the irony that the ban has proved a more effective marketing tool than a regulatory one. People who hadn’t been fans of the movie universe are suddenly interested in what happened in that one scene that moved a government regulatory body to ban it.

Other regulatory tools – like a tax or fee on these banned things or a hybrid tax-ban – exist and promise to be more beneficial for the government and less restrictive such that the spirit of a free democracy is not truncated with bans that infantilise the population.

It begs the question, if bans by their nature are largely counterproductive – particularly when targeted at the population, why do regulators insist on it? What do Nigerians feel about regulation in general? And most importantly, what do alternative regulatory tools hold for the country and its economy?

In justifying its crypto ban, CBN explained that cryptocurrencies transactions lack proper regulation and are prone to financial crimes. Nigerians, in response, have noted that regulators could tighten loopholes instead of placing a wholesale ban. Other ways also exist that regulation could be put in force in a way that leaves the choice to partake open and also generates income for the government like a tax/fee on transactions.