Nigeria’s central bank has ordered commercial banks to not facilitate services to crypto exchanges.
“The Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.
Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.
Please note that breaches of this directive will attract severe regulatory sanctions. This letter is with immediate effect,” the central bank said.
They do not however have the authority to make such order because only parliament can make law.
Bitcoin is not prohibited by an act of parliament, and therefore is not illegal. As such, Nigeria’s central bank can not make illegal something that according to the law of the land is legal.
This diktat therefore will most probably be overturned by Nigeria’s Supreme Court, just as the Indian Supreme Court overruled a similar diktat on the grounds of disproportionality.
If it doesn’t do so, then most will assume Nigeria does not have an independent judiciary, and thus in effect it does not have the rule of law which is the foundation of commerce and prosperity.
There’s rumors Nigerians are already getting around this diktat in any event, probably not least because they’ve entered the bitcoin market through peer to peer platforms like Paxful, and thus can’t be systematically affected.
In addition the Nigerian people have great incentive to utilize bitcoin because their central bank has been doing such a terrible job for years that inflation has hit 15% while food inflation is at 20%.
Nigeria has clearly been printing money like nothing with interest rates at 11.5% and their currency, Naira, expected to devalue by another 10%.
There’s apparently some dollar shortage in the country as well, so the middle class there might have no choice but to run to safe havens like bitcoin regardless of whatever unconstitutional diktat their central bank prints out.
Hence bitcoin’s global price has not been affected negatively, instead it has risen above $40,000 today amid all this printing by banks.