Cryptocurrency trading is a fast-growing industry in Africa. Cryptocurrency trading involves the buying and selling of virtual currencies such as Nigerian Debit and Ghana Gold, among others.
Virtual currency trading is popular in countries like China and Kenya, which allow for free trade within their local markets. However, Cryptocurrency trading in many African countries such as Nigeria and Ghana has been restricted by the Nigerian central bank. Cryptocurrency trading is currently banned in the country.
Cryptocurrency exchanges are not allowed by Nigerian authorities except for those registered members of the Comecon organization. Accordingly, traders must be members of Comecon to access the Nigerian market.
Cryptocurrency exchanges are illegal under the guise of regulating the foreign exchange industry. central bank directive issued stern regulatory warnings of severe regulatory sanctions to anyone found operating Cryptocurrency exchanges.
Nigeria s central bank advised all financial institutions and other commercial banks to immediately close accounts operated by or transacting in Cryptocurrency exchanges, stating that such transactions are prohibited.
The directive also stipulated that all activities related to the selling or buying of Cryptocurrency within Nigeria are unlawful. Nigerians caught participating in such transactions may face criminal prosecution.
There were reports of individuals selling cryptocurrencies for profit on the forex market. There were also reports of individuals advertising such transactions through websites.
According to the Nigerian government, it was a fraudulent advertising method known as pimping. This refers to the practice of advertising the sale of Cryptocurrency that does not exist.
The Nigerian government will continue to monitor the exchange commission and will pass legislation that prohibits the marketing and trading of Virtual Currencies.
The directive also stipulates that all Nigerian financial institutes and banks will discontinue the issuance of credit cards in any country that does not recognize its currency. This includes all of the currencies used in Nigeria. This is a very important step forward in the fight against Cryptocurrency.
The central bank directive indicates that persons who transact in Cryptocurrency must be aware of both the benefits and risks involved. There was a suggestion that the use of the Nigerian non-domestic currency might increase the risk of being seized by the Nigerian authorities.
The use of the two most common legal forms of payment, themes, was also suggested as a way of increasing the chances of legal action against those that attempted to use Cryptocurrency exchange. The use of Fiat Currency was also prohibited by the Nigerian central bank.
The directive also stipulated that all measures taken to prevent the use of Cryptocurrency by those wishing to conduct business on the black market would be considered as a legislative ban.
This means that if a retailer tries to circumvent the crypt currency trading ban, then that retailer may be prosecuted under the Criminal Code for providing financial services that are in violation of the law.
A fine could be imposed on the trader as well. In addition to this, any person found to be involved in the promotion of the use of Cryptocurrency could be arrested.
The directive does not explicitly define how Cryptocurrency activities should be monitored or how the ban would apply to social media platforms. However, the implication of the directive is that Nigerian trading or conducting business using Cryptocurrency is illegal. The social media giants have taken measures to prevent their websites from being used for such purposes.
Given that the directive came from the Nigerian government, many wonder how other governments will follow suit. It is highly likely that once news of the Nigerian central bank ban spread throughout the wider global community, other nations will follow suit.
This sets up an interesting time for the budding entrepreneur. If a nation such as Nigeria, which has embraced Cryptocurrency as a means of solving issues of poverty and financial instability, then surely others will follow.
Given that most entrepreneurs are not technically inclined, this will be an ideal situation for those who wish to get into Cryptocurrency trading without being stuck with a multitude of technical issues.
This is the reason why many people believe that a centralized authority may be the best platform for those wishing to trade and invest in Cryptocurrency; because it offers a set of tools that help simplify the process.
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