When it comes to the topic of regulation and Bitcoin, the opinions will always remain divided. The Central bank of Nigeria, while dealing with plenty of problems of its own, found the time to support regulation of cryptocurrency. This is not entirely surprising, as the institution has opposed Bitcoin from day one.
Although cryptocurrencies cannot be regulated by default – no central authority or point of control – various
banks around the world feel they can do so. What they can do, however, is impose regulations for companies dealing with Bitcoin and consorts. In most cases, exchanges and lending services are targeted by these regulatory guidelines.
One of the primary reasons wy financial institutions like to stick regulation on Bitcoin is due to alleged money laundering. Up until now, there is no credible evidence of Bitcoin being used to launder large amounts of money. Nor would that even be possible, as the markets provide far less liquidity to conduct such business on a large scale. Plus, Bitcoin was not even mentioned in the
Panama Papers either.The Central Bank of Nigeria stated:
“As you are aware, the virtual currency market is an unregulated market in Nigeria and based on recent communications with the CBN and our risk appetite as a Bank, we have decided to cease dealings with dealers in virtual currencies until such a time when the market becomes regulated.”
What this means is the financial institution will close bank accounts of anyone in Nigeria dealing with Bitcoin. Once again, this goes to show much control banks have over people’s money and resources. Bitcoin, while not being subject to regulation, provides the financial freedom so many banks are utterly afraid of.
Unfortunately, this decision will have a negative impact on Nigerian Bitcoin businesses. For now, the majority of platforms can operate without too many concerns, as regulation has not been drafted. On the flipside, decisions like these will alienate Nigeria from the global Bitcoin community in the long run, which is not a favorable position to be in by any means.
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