🧐 How Nigeria🇳🇬 went from Bitcoin-Friendly to Crypto hostile

🧐 How Nigeria🇳🇬 went from Bitcoin-Friendly to Crypto hostile

Chainalysis estimates that between July 2022 and June 2023, African countries received a total of $117 billion USD in Bitcoin, with Nigeria receiving the largest share. However, in recent years, Africa’s most populous country has become increasingly hostile towards cryptocurrency businesses.

👉👉 Some Facts 👉👉
➡️ In February, Tigran Gambaryan of Binance was arrested.

➡️ On July 12, a Nigerian court increased the tension in the diplomatic standoff with the U.S🇺🇸, keeping Gambaryan in custody until October 11.

➡️ OKX recently announced to its users that it will withdraw from the Nigerian market in August 2024 due to regulatory uncertainty.

➡️ On July 8, KuCoin introduced a 7.5% VAT (in addition to a 0.1% transaction fee) for Nigerian users, citing “changes in local laws.”

👉👉 Context 👉👉
Since 2016, Nigeria has faced two major recessions, exacerbated by the Covid-19 pandemic and the drop in oil prices. In 2022, the Central Bank of Nigeria (CBN) announced plans to redesign naira banknotes to combat inflation and counterfeiting. However, this led to a cash shortage, with inflation reaching record levels of over 20% in early 2023.

The SEC has accused centralized cryptocurrency platforms (CEX) of manipulating the local fiat currency, which they claim contributed to runaway inflation.

👉👉 Consequences 👉👉
➡️ In April, the CBN ordered fintechs Opay, Moniepoint, Paga, and Palmpay to block the accounts of customers making transactions with cryptocurrencies.

➡️ In May, the Nigerian Securities and Exchange Commission (SEC) ordered trading platforms to remove exchange pairs involving naira. Since then, users have faced difficulties accessing exchange sites.

➡️ Traders have moved to underground methods.

➡️ Some analysts suggest that these restrictions won’t stop currency trading but will push it to P2P networks on social media and DEX platforms.

Interestingly, the initial state policy towards blockchain was designed to create a favorable environment and support related businesses, including cryptocurrencies.

#news #crypto