Nigeria: IMF supports decision by central bank to end cryptos trading

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Thanks to the explosive growth reported recently by the cryptocurrency industry, regulators around the world recognise that they will need to speed up the process of issuing crypto-currency guidelines in their countries. Although some countries like the United States are looking to set up technical standards, others like Nigeria have declared a ban of sorts.

In a recent update, the Central Bank of Nigeria [CBN] has obtained support from the International Monetary Fund [IMF] for its decision to close the country’s crypto accounts. The IMF is apprehensive regarding cryptocurrencies, with the Organization making its concerns evident in its 2020 report Article IV of the IMF Staff Report for Nigeria. Similarly, due to the risks raised by cryptocurrencies, the caution shown by the Nigerian monetary authority is justified.

The aforementioned study expresses concern about the use of cryptocurrencies such as Bitcoin by the Resident Representative of the IMF for Nigeria, Ari Aisen, because they have been linked with many illicit activities such as money laundering and drug peddling in the past.

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Aisen said, ”

“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.”

While top regulators are concerned about the usage and development of Bitcoin, along with other cryptocurrencies, the crypto market across countries is becoming increasingly common. Nigeria, for example, has become one of the most successful countries in terms of crypto adoption, with a ban on crypto now rerouting traders to peer-to-peer platforms.

In addition, according to data provider UsefulTulips, Nigeria’s P2P volume was the largest at $8.4 million. With technology continuing to enter the country, it will be difficult for the central bank to secure or discourage its people from using digital assets. Regulations can, however, support the country by protecting the sovereignty of its fiat while at the same time keeping the use of crypto under control.

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