According to local news reports, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, says it will "allow" the trading of Bitcoin and other cryptocurrencies.
In February this year, CBN Director Bello Hassan signed a letter warning money service providers of severe regulatory penalties if they dealt with cryptocurrency exchanges.
Aside from hitting a total market capitalization of $ 2.5 trillion, not much has changed in the crypto-verse between then and now, at least not fundamentally. This begs the question, why has the CNB backtracked on its earlier call?
Emefiele takes a 180 degree turn on cryptocurrencies
Nigeria has an uneasy relationship with Bitcoin. Although there is no legislation criminalizing cryptocurrency transactions, the West African country's authorities have chosen to restrict entry / exit ramps to seal their rule on the matter.
The CBN says this is necessary to protect citizens from the risks of cryptocurrency trading. Also, as an unregulated market, there is no legal remedy in case things go wrong. Emefiele has also linked illegal activities, including money laundering and terrorist financing, to Bitcoin.
However, in an apparent change of mind, Emefiele now says, "digital currency will come to life" in Nigeria.
"We are engaged in the CBN and I can assure everyone that the digital currency will come to life even in Nigeria," he said.
Despite that, he still maintains a distant focus on cryptocurrencies, insisting that his research shows that most are illegitimate:
“We have carried out our research and found that a substantial percentage of our people are getting involved in cryptocurrency, which is not the best. Don't get me wrong, some may be legitimate, but most are illegitimate. "
Nigerians ignore Bitcoin 'ban'
Due to several factors, the main of which is an unstable naira that continues to lose purchasing power, Nigerians have paid little attention to the CBN decree.
Before the February CBN directive came into effect, Nigerians reported the highest share of cryptocurrency use of all countries surveyed. 32% of respondents say they own or use cryptocurrencies. For comparison, the US ranked 8th with 6%.
"Strong bitcoin trading activity in Nigeria has earned the country the title of the Bitcoin Nation of Africa."
In response to on / off ramp restrictions, the Nigerian crypto economy has adapted, and peer-to-peer exchanges are increasing in popularity. Another means of thwarting the CBN ban comes through over-the-counter (OTC) trading, which has also seen a boom after February.
As Bitcoin bull Anthony Pompliano says, "You can't kill the network." Which is an understanding that the Nigerian authorities have recently come to realize.