More Nigerians turn to virtual currency, ignore CBN ban

More Nigerians turn to Cryptocurrency, ignore CBN ban

FG Cashless Policy:

The cashless policy of the CBN is to reduce or totally eliminate bulk cash transactions in the economy. If the FG’s cashless policy is anything to go by then Bitcoin is the way.Report has it that, while digital payments would replace the usage of cash in the developing countries, they would also allow for the switch to electronic record-keeping. In fact, these mobile financial services have the power to address inequity, poverty, and perhaps even remove government corruption. Recent study by Mckinsey Global Institute reveals that mobile financial services in developing markets like ours are area to focus on right now. In doing so, the GDP of these economies would increase by nearly US$4tn by 2025. Bitcoin will further engender the financial inclusion strategy of the CBN and continue to stimulate commercial activities in the nation’s economy.

More Nigerians turn to virtual currency, ignore CBN ban

In January, CBN issued a circular to banks and other financial institutions requiring them not to use, hold, trade and/or transact in any way in digital currencies. The CBN cited money laundering and terrorism financing as reasons for ban, specifically naming “Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin”, and similar virtual currencies. Despite this crackdown on virtual currencies in banks, international transactions have continued online using virtual currencies as more countries embrace the payment mode.

Investigations reveal that the users have no need of banks, or regulators to transfer virtual currencies; all they need is their laptop and an internet connection. Across the globe, the popularity of virtual currency such as Bitcoin are increasing with big companies like Microsoft, Dell, Amazon, accepting it as currency of payment and some countries such as Barbados now making use of Bitcoin as legal tender. Hence anyone can buy international products and services online from these countries using the Bitcoin.

For instance, Mr. Obinna, 35 years old importer, who does his international transactions using Bitcoin, says he has been trading in Bitcoin for two years now without the help of any bank. “so, the ban does not stop me from trading with the currency”. Bitcoin does not need bank.

The high interest rate charged by Nigerian commercial banks makes it hard for us to transfer foreign currency through banks. But with the use of Bitcoin, I transfer money to my foreign associates in Bitcoin and they can convert it to their currency. This makes transfer of fund easy, even undetected and I do not pay any bank interest or other charges”. According to him, he has become a multi-millionaire overnight just by trading with virtual currency. Aside that, Obi revealed that he also buys and trades Bitcoin. “I buy the currency when the rate is lower and sell when higher, just like forex trading. For me to do this, I have to monitor the market”. On how he exchanges the virtual currency for real cash he said, “Bitcoin has an online exchange platforms such as Netteller, Bitex and localbitcoin. when I go to any of the sites, I can sell or exchange my Bitcoin for Dollar, Naira, Pound, Euro or any real currency. I can also buy Bitcoin at lower rate from any of the exchangers, and sell at higher rate to another exchanger based on their selling prize”.

Another Bitcoin user, Michael, said he got introduced to Bitcoin through the MMM Ponzi scheme, whenever I play games online or invest in MMM scheme using Bitcoin, I discover that the return is much higher. From then I got more interested in Bitcoin. I soon realize that the currency has global acceptance and value morethan dollar and other currencies in international market. For instance, today one Bitcoin is equivalent to about 1000 USD depending on the exchangers. Now I carry out transactions on the internet using Bitcoin and it is easier for me no bank interest, the transfer is swift and anonymous.

As at the time of this publication, Bitcoin virtual currency, sells for the rate of 1 Bitcoin to 1011 USD, making it almost as equal to gold in value. But the currency is flexible, meaning it can go up and down tomorrow an IT Specialist, Mr. Chukwudalu Chukwuneta, divulged. He explained why the currency is so favoured. It is anonymous – user can hold multiple bitcoin addresses that are not linked to names, addresses, or other personally identifying information. You can transfer 50 million Naira worth of Bitcoin and no one will know or question you. It is also fast, you can send money anywhere and it will arrive minutes later, as soon as the bitcoin network processes the payment. Unlike bank transaction, there is no transaction fee. It is not controlled by one central authority and it is easy to set.