Thanks to the exponential growth recorded by the cryptocurrency market lately, regulators around the world are realizing that they may have to fast-track the process of issuing guidelines with respect to crypto in their countries. While some countries like the United States are looking to form norms around the tech, others like Nigeria have announced a ban of sorts.
In what is a recent update, the Central Bank of Nigeria [CBN] has received the support of the International Monetary Fund [IMF] for its decision to close accounts dealing with crypto in the country. The IMF is apprehensive about cryptocurrencies, with the agency making its concerns clear in its 2020 Article IV IMF Staff Report for Nigeria. According to the same, the caution shown by Nigeria’s monetary authority is warranted due to the risks posed by cryptocurrencies.
The aforementioned report has the Resident Representative of IMF for Nigeria, Ari Aisen, express concerns about the use of cryptocurrencies like Bitcoin since they have been associated with a lot of illegal activities like money laundering and drug peddling in the past.
“The issue with some of the cryptocurrencies is that perhaps some care should be taken about their activities. The use of cryptocurrencies is a concern. That is why some central banks, not only in Nigeria, have these concerns about what kind of activities these cryptocurrencies are put and how best to monitor those activities.”
Although top regulators are worried about the use and growth of Bitcoin, along with other cryptocurrencies, the crypto-market across countries is increasingly becoming popular too. For instance, Nigeria has been one of the most popular countries in terms of crypto-adoption, with a ban on crypto now re-routing traders to peer-to-peer platforms.
Further, according to data provider UsefulTulips, the P2P volume for Nigeria has been the highest with a figure of $8.4 million. With technology continuing to penetrate this region, it will be difficult for the central bank to protect or prevent its citizens from using digital assets. However, regulations may help the country by protecting the sovereignty of its fiat, while keeping the use of crypto in check.