Nigeria stands at the forefront of cryptocurrency trading on the continent. However, the governmental perspective on cryptocurrency trading threatens the fight for a decentralized economy. In recent months, the Nigerian authorities have intensified their regulations, such as the crypto ban, leaving traders and investors asking: What now?
So if you’re wondering how to trade and profit from crypto without triggering governmental alarms, this is for you.
In this article, we will discuss the latest CBN regulations, their impact on crypto traders and businesses alike, and finally, how to maintain your crypto steeze amid all these tensions.
The reason behind the restrictions
Initially implemented in February 2021, the ban prohibited financial institutions from providing services related to cryptocurrencies, causing a ripple effect in the country’s burgeoning crypto market. While most traders were trying to adapt, the government dealt another blow, banning all P2P transactions across the country. Thus, crippling the major arms of crypto trade in Nigeria.
Why does the government do this?
Apparently, crypto exchanges are to blame for the devaluation of the naira.
According to Premium Times, the official reason was the “continuous manipulation of the forex market.” and “reports that currency speculators and money launderers were using [crypto platforms] to execute criminal activities.”
In the case of Binance, Bayo Onanuga, the presidential advisor accused them of allegedly “setting the exchange rate for Nigeria, hijacking the CBN’s [Central Bank of Nigeria] role.” While the accuracy of these allegations remains speculative, there is no doubt that these restrictions might’ve originated due to pressure from the depreciating naira.
It is no news that the naira has underperformed recently, ranking 3rd among the top failing currencies in the world. Meanwhile, financial analysts predict that the naira may plunge further in 2024, describing it as its “worst year since the return to democracy in 1999.”
This brings a concerning premise that this “crypto witch-hunting” might be a desperate attempt to “fix” the economic crisis by using crypto exchanges as a financial scapegoat.
What are the Impacts of the Crypto Ban on Traders and Exchanges?
Although, there have been some losses here and there, including fund freeze, affecting over 1,100 bank accounts believed to be involved in crypto activities.
Surprisingly, these restrictions also seem to boomerang on cryptocurrency activities in the country. According to Chainalysis, Nigeria’s volume of crypto transactions grew by nine percent year-over-year to $56.7bn between July 2022 and June 2023.
Also, there was a considerable spike in Bitcoin’s value, following the crypto ban in June 2023.
Helpful tips to apply when trading
If you’re a trader, this is the point where you ask yourself: should I quit, or keep moving? If you decide on the latter, here are some helpful tips to trade safely in Nigeria:
- Research the platform’s reputation online to ensure it’s credible.
- Check if the platform has strong security measures to protect your assets.
- Verify if it’s compliant with regulatory requirements, especially in light of Nigeria’s new policies.
- Read reviews from other users to ensure it’s reliable and trustworthy.
- Lastly, consider using a platform like the Jackocoins exchange platform, which is known to have great security for your asset, a user-friendly interface, and security when trading on the app.
How we can help
Despite the imbalance between the government and crypto, reputable platforms like Jackocoins remain steadfast in providing quality service in crypto trades while maintaining an equilibrium with legal restrictions, so that you can trade peacefully and legally. You also get to enjoy:
- Ease of use: The platform features a smooth, visually appealing interface that simplifies asset management. With the Jackocoins app, everything is just a few taps away.
- Real-Time Notifications: Jackocoins alerts you instantly about any activity, from transaction confirmations to security updates. This keeps you in the loop and helps you manage your assets proactively.
- Zero Fees on all Transactions within the Jackocoins Platform: With this feature, you can trade without worrying about high costs or annoying fees.
Trading Amid Crypto Ban: Our opinion
Despite the current challenges, Nigeria’s crypto industry continues to thrive. Clear rules and guidelines are needed to protect traders and promote innovation. With the right environment, Nigeria can lead Africa’s crypto market and unlock the full potential of cryptocurrency trading. Nigeria will remain among the world’s most ardent crypto lovers.
Likewise, traders should understand their CBN regulations, and learn how to choose the right crypto exchange, like Jackocoins, which allows local trading in naira and prioritizes your security to make your trading experience great.
Frequently Asked Questions
How can traders stay safe and secure when trading crypto?
Security is paramount in crypto trading. Use reputable wallets like Jackocoins, use a strong password and be wary of phishing scams. Regularly update your software and keep your private keys secure. Staying vigilant can protect your investments from cyber threats.
What are the tax requirements and legal considerations?
Crypto trading in Nigeria has tax implications. It’s important to understand the tax requirements and legal considerations associated with cryptocurrency transactions. Consulting with a tax professional can help you navigate these complexities and ensure that you remain compliant with Nigerian tax laws.
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