In a circular issued by the Central Bank of Nigeria CBN, Friday, all regulated financial institutions are banned from providing services to crypto exchanges in the country.
The new rule is an extension of earlier warnings from the bank about the purported risks associated with digital currencies.
The CBN has directed all commercial banks to close accounts belonging to crypto exchanges and other businesses transacting in cryptocurrencies in the country. The central bank warned of stiff penalties to any bank or financial institution that fails to comply with the directive.
The support for and adoption of cryptocurrencies spiked in Nigeria during the protests against police brutality in October 2020 when the central bank ordered the suspension of bank accounts belonging to supporters of the EndSARS movement, prompting a switch to Bitcoin (BTC) and crypto donations.
According to data from Google Trends, Nigeria is still number one in the world in terms of search interest for Bitcoin. The country ranks second in peer-to-peer bitcoin volume.
Back in September 2020, the Nigerian Securities and Exchange Commission recognized crypto as securities with plans to formulate a concrete legal framework for digital assets.
The latest ban by the CBN, reminiscent of the actions taken by its Indian counterpart, the Reserve Bank of India, back in 2018. Two years later, India's Supreme Court reversed the order.
Analysts and crypto advocates warn that regulatory actions against the adoption of Bitcoin will only set back national governments' technological readiness to deal with the inevitable disruption that is already happening to legacy monetary and banking systems.
Free speech and human rights advocates argue that decentralized nature of cryptocurrencies guards against financial de-platforming by Big Finance companies and authoritarian governments. Bitcoin is more akin to digital gold and cannot be frozen or seized by any one state or finance entity.
As free speech social network Gab CEO Andrew Torba put it: "Bitcoin allows anyone in the world to store value digitally and transact in a way that is secure, censorship-resistant, and doesn’t require permission or approval from any government, corporation, or bank."
Torba revealed in the blog that: "Gab has been banned by dozens of payment processors ... and many cryptocurrency payment platforms like Coinbase and Bitpay."
Free speech and human rights activists point to cases such as Torba's as an example of how powerful Big Finance globalists can exclude and oppress marginalized persons or communities. Bitcoin fixes this, activists argue.