The Central Bank of Nigeria (CBN) has given reasons why the Cryptocurrencies were banned in Nigeria.
In a statement on Sunday, February 7 by the Acting Director, Corporate Communications, Osita Nwanisobi, the apex bank said it did not place any new restrictions on cryptocurrencies.
According to him, “The use of cryptocurrencies in Nigeria are a direct contravention of existing law. It is also important to highlight that there is a critical difference between a Central Bank issued Digital Currency and cryptocurrencies.
“As the name implies, while central banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities.
“The question that one may need to ask therefore is, why any entity would disguise its transactions if they were legal.
“It is on the basis of this opacity that cryptocurecies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchasing of small arms and light weapons and tax evasion.
“Many banks and investors who place a high value on reputation have been turned off from cryptocurrencies because of the damaging effects of widespread use of cryptocurrencies for illegal activities.
“The role of cryptocurrencies in the purchase of hard and illegal drugs on the dragnet website called “Silk Road”is well known.
“There have also been recent reports that cryptocurrencies have been used to finance terror plots, further damaging its image as a legitimate means of exchange.
“More also, repeated and recent evidence now suggests that some cryptocurrencies have become more widely used as speculative assets rather than as means of payment, thus explaining the significant volatility in their prices.”
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