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CBN Crypto Ban Increases P2P But Is It Also Increasing Crypto Scams?



Crypto ban

The Central Bank of Nigeria CBN on the 5th of February 2021 caused an uproar within the crypto community in Nigeria and globally. The Apex bank released a circular that prohibits financial institutions from processing crypto-related transactions. Banks and other financial institutions were also directed to close accounts that made crypto-related transactions.

As expected the directive did not sit well with crypto enthusiasts, traders and most Nigerians alike. In the CBN’s defence, they were protecting Nigerians from crypto-related scams, volatility of the crypto market and several evils perpetrated with cryptocurrencies. Though valid reasons, many Nigerians still express their resentment of the directive. Cryptocurrencies which serve as an alternative to the weakening Naira are faster and easier at facilitating cross border transactions. 

However, the ban has not hindered crypto transactions in the country. The country still ranks high when it comes to crypto transactions globally. Business Insider reports that between January and March 2021,  p2p trading value of bitcoin in Nigeria was worth $99.1 million. This is $9 million more than the value of bitcoin p2p transaction in Kenya for the whole of 2020. Cleary p2p has increased significantly since the ban. It is therefore safe to say that the ban has increased crypto activity in Nigeria. But has it increased crypto scams too?

The dark side of p2p

While volatile nature cryptocurrencies might in truth lead to loss of funds, the ban by the Central Bank of Nigeria could make Nigerians more vulnerable to crypto scams as they now purchase these digital currencies from unregulated sources hence, p2p.

“It was very easy just buying bitcoin straight from the Luno app but now I need to find someone who is willing to sell me bitcoin and there is really no way to ascertain the person’s trustworthiness.” This statement by crypto newbie, Adekunle Agbetiloye sums up the troubles and vulnerabilities crypto newbies go through to buy and sell crypto assets.

Kunle has been fortunate to have friends that are more grounded in trading cryptocurrencies. This has prevented him from falling into the hands of scammers that find newbies like him, easy picking. In his words “I know people that have fallen victim to crypto scammers that is why I only transact with people that I know personally”.

Ezekiel Juwon wasn’t lucky enough to buy from someone he knew personally. He recounts how he unsuspectingly sent money to a crypto scammer. In his words, “as a beginner I think it is more convenient to buy directly from crypto apps than dealing peer-to-peer. As someone who has experienced crypto scams first hand, I know this for a fact”. Juwon also adds that regulated p2p platforms created as an alternative to trading crypto can also be dangerous. He is convinced that more people will suffer his fate if the ban isn’t lifted. “Everyone wants to get in on crypto, it saves you from poverty so the ban just makes newbies vulnerable”. 

Just like Adekunle, Oyin Komolafe is fortunate to be surrounded by crypto veterans. She says “aside from the grace of God, what is helping me is that I am surrounded by people who know their way around crypto. However, I am sure that newbies will be susceptible to crypto scams because of the CBN ban”

What experts have to say   

However, Crypto expert and blockchain stakeholder, Samuel Attah feels crypto platforms have created alternatives that should keep crypto newbies safe. He sights Bundle as an example of these platforms. In contrast, some of these new users have said they do not find these platforms easy to use. 

Another crypto trader who identifies himself simply as Smogz, says these alternatives by crypto exchanges and crypto platforms require a lot of expertise. Smogz believes that the ban will increase crypto scams. “Crypto platforms serve as a shield to protect crypto beginners from scams. Now that these beginners have to look outside of the confines of these platforms they are open to being ripped off”

It is clear the crypto ban cannot stop Nigerians from using cryptocurrencies. Although a risky investment venture, crypto assets are known to be a source of wealth. Ensuring the safety of Nigerians while they use these crypto assets should be a priority.


Bolu Abiodun is a recent graduate of Theatre and Media Arts, Federal University Oye-Ekiti. A journalist with over a year's experience on the job. A former editor at American Media company Project Forward, he is a skilled content creator, social media manager and digital marketer.

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Crypto Assets

The unruliness of the crypto world



What is the underlying philosophy behind decentralized cryptocurrencies? In a word, democratization of finances, hence their being decentralized. Cryptocurrencies came to remove, in a sense, the middle man of the finance world, banks, and place the power over finances in the hands of the individual. The second point would be to usurp the reach and influence of government backed fiat money, effectively becoming the medium of value exchange for most.

Cryptocurrencies have been called the currencies of the future for many of their innovative qualities.

Evidently, the crypto world is still quite in its infancy, relatively speaking, and this is the time that’ll essentially chart the course it would take, whether to remain true to the core philosophies underlying the creation of the very first one, Bitcoin, or whether it’ll deviate. And so far, a lot of deviation is what’s been happening in the crypto world. The unprecedented rise of cryptocurrencies has opened an era of private-sector controlled finance in a way never seen before. Of course, private banks and money houses have always existed but this is on a different level entirely. For one, private conventional banks use the accepted legal tender created and backed by a government whereas with cryptocurrencies, well, entire currencies are created. And there are quite a number of them.

While bitcoin and it’s copycats may have aimed to achieve democratization of finance, not all have that goal in mind. For many altcoins, the idea can be fairly simple or sometimes oddly specific such as building a currency off a joke or trend and having people trade on it as in the case of memecoins. While the argument for and against crypto use an adoption roars on, with the way the markets look and behave, one would wonder if cryptocurrencies are really money in the actual sense of the word. They could be viewed as a commodity and money, fiat money, is certainly a commodity. However, it  feels odd to think that the systems that hope to revolutionize our methods of exchanging value, hold or get their value from the very systems they wish to replace.

But of course, it can’t be helped. Even fiat currencies have their values pegged to some arbitrary thing or another fiat currency even. And today, with numerous coins in the space and the numerous philosophies and use cases backing them, as well as volatility, use for illegal activity and so many other issues, one can’t help but feel that the space is in many ways, confused. Many are in it to get a laugh, others to scam people of their money, while many are genuinely invested in seeing the tech grow.

And so, the space is unruly in some ways, amazing in others. Evidently, as adoption increases beyond interest for profit making in the trading sense, world governments are going to have to step in and really regulate the space which is probably what many crypto enthusiasts do not want. However, it can’t be helped especially seeing that there’s no consortium of sorts or standards laid down across board to really drive some sort of cohesion in the marketplace.

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Can Central Bank Digital Currencies Replace Stablecoins?



Image Credits: Forbes (Image Modified)

The rapid rise in circulation of stablecoins over the past couple of years and the popularity of Central Bank Digital Currencies (CBDCs) of various countries has raised questions on what the outcome of both would be in future. While cryptocurrency is reputable for its innovation in ushering in a new era of financial inclusion, it is, however, not without its shortcomings as various countries are beginning to clamp down on it. This article explores the meaning of both currencies, the relationship and the likely co-existence of both in the future. Let’s dive straight into it.

What are stablecoins?

Stablecoins are cryptocurrencies that seek to regulate the crypto market by offering price stability, especially during market volatility. Let’s skip the grammar and technical definitions. In simple terms, stablecoin is like a referee in a football match; despite the fun and enthusiasm, it does not get carried away and ensures stability. A popular stablecoin is Tether(USDT), whose price is pegged to the US Dollar. Some have their prices pegged with other assets such as gold, forex reserves, other cryptocurrencies. It is common knowledge that cryptocurrency is highly volatile; prices go high and drop from time to time. Stablecoin is important because of the way it stabilizes the market during volatility. 

CBDCs explained

Central Bank Digital Currencies are innovations that have gained wider popularity in recent months. It refers to a virtual form of fiat currencies. CBDCs are pegged with a country’s official fiat currency i.e., e-naira. Most CBDCs arose out of the need to nip the menace of cryptocurrencies in the bud. Thus, it is issued and regulated by the nation’s highest monetary authority or a central bank with the full backing of the government. 

Can stablecoin and CBDCs co-exist?

It might be too early to make clarifications on the future CBDCs and stable coins since most CBDCs arose out of the government’s aversion to cryptocurrency. However, a strong case can be made for their co-existence; they provide separate services such as DeFi services and liquidity provisioning as well as direct access to the country’s official fiat currency. It is needless to state that stablecoins serve as the motivation behind the development of CBDCs, for the latter to keep evolving into easy-to-use options, stablecoins must play an important role in its development. Since CBDCs already have the backing of the government, it is treated as the digital equivalence of the country’s official currency that can be used to purchase goods, settle bills and un day to day activities. Unlike stablecoins, it is not an asset. Both have different functions, although they are similar it is common knowledge that nothing similar is the same. 

Co-existence between stablecoin and CBDCs: what experts have to say

Speaking with KoreaHerald, Nelson Chow, chief fintech officer of the Fintech Facilitation office at the Hong Kong Monetary authority stated why both CBDCs and stablecoin will co-exist by calling them ‘two different animals.’ He stated that they will coexist because cryptocurrencies(stablecoin) are not solving payment problems, rather, they are used as a means of storage. This is different from the decades-old problems of cross-border transactions that CBDCs seek to achieve. 

John Kiffmeiste, a former senior financial sector expert at International Monetary Fund (IMF) holds a dissenting opinion. He stated that the emergence of CBDCs projects would make crypto-assets obsolete. To avoid this, he explained that since legislative walls are beginning to close against crypto assets, they will begin to operate under the rules that other conventional assets operate within. When this occurs, both will co-exist. 

This assertion was further corroborated by a report of the G7 Working Group on Stablecoins that was conducted to investigate the impact of global stablecoins. The report states that the components (such as the issuer and market-makers) within stablecoins may be complex, thereby leading to fragilities if the relationships between the components remain unclear. Also, that the purchases of safe assets of stablecoins reserve could lead to a shortage of high-quality liquid assets thereby affecting financial stability.  Due to this, it recommends that stablecoins should be regulated. 

The importance of competition cannot be overemphasized – irrespective of the sector that is being examined. Going forward, there will be uncertainties in the crypto and financial industry at large, these gaps will be filled by the coexistenceco-existence of both CBDCs and stablecoins.

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Nigeria’s Digital Currency Gets Mixed Review From The Crypto Ecosystem



Bitcoin investment

Nigerians have called on the administrator of President Muhammadu Buhari to focus first on managing the dwindling Naira before proceeding to digitalize the country’s currency. 

This came in the wake of the recent launch of Nigeria’s digital currency, eNaira by President Buhari on October 1 at the State House, Abuja.

What is eNaira?

The eNaira is an alternative payment system and store of value for households and businesses to hold and use. To establish the ecosystem, users will need to convert some of their existing bank deposits into eNaira to hold in their wallets.

The eNaira is a Central Bank Digital Currency (CBDC). Although the naira has allowed digital transactions before as you can transfer money or make payments from your phone or laptop via the bank’s app or payment platform as long as you are connected to the internet, or via USSD without the internet, this new development is to ensure there is a fully digital version of the fiat Naira. 

However, the new eNaira is not like other digital (crypto) currencies as it is backed by a country, Nigeria and it is tied to a fiat currency, Naira. The closest comparison to eNaira in the world of cryptocurrency would be the USDT, a stable currency tied to the US Dollar, called Tether. 

This new digital currency, which has taken four years to form, will put Nigeria on the global tracking map of Central Bank Digital Currency (CBDC) as the fifth country to launch a centralized national electronic currency. Nigeria now joins Bahamas, Sweden, Cambodia, South Korea as pioneers of CBDC.

What is the idea of eNaira being tied to the fiat Naira?

This means the eNaira and the fiat Naira will be the same value at all times. Also, that the currency is backed by the government through the Central Bank of Nigeria (CBN) and this will be a comfort as the CBN cannot default on its obligations. 

There are some issues in the case of cryptocurrencies which includes; loss of pin/passcode, theft, misplacement or corruption of device, collapse of exchanges, loss of backup keys amongst others.

For the case of eNaira, the digital currency has two applications; eNaira Speed Wallet and eNaira Merchant Wallet which can be found on both Google and Apple app stores.

What problem will the eNaira solve?

During the launch, President Buhari said the adoption of the eNaira is expected to increase Nigeria’s GDP by $29 billion over the next 10 years. 

Speaking at the unveiling event which had the Vice President, Yemi Osinbajo; governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, and other dignitaries in attendance, the President said:

“We have become the first country in Africa and one of the first in the world to introduce a digital currency to our citizens.”

The apps website also outlines the overall value of the currency to Nigeria’s economy and its functions. 

“eNaira is a Central Bank of Nigeria-issued digital currency that provides a unique form of money denominated in Naira.

“eNaira serves as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments,” the statement read. 

Nigerians’ Reaction To eNaira’s Launch

Since the launch of the eNaira, Nigerians, mostly on social media have expressed skepticism and criticism over the currency’s sustainability by the Federal Government as they hope the innovation will have a positive ripple effect on the Naira. Here are some of the things people had to say;

OluwaFemi J. Olagunju: “Under this present Central Bank governor, our economy has become nosedive than ever before, and the naira is at its weakest. Instead, the Central Bank of Nigeria has continually looked for ways to exploit Nigerians through silly numerous bank charges. Instead of launching the e naira, the failed Central Bank governor should be interested in at least returning the value of naira to what he met when he got into office. “The Central Bank governor witch haunted those who took part in the EndSARS protest by placing embargoes on their accounts. Why has he not done the same to bandits or killer herdsmen?”

Garba Talasse: “We are becoming digital Nigeria. Thank you CBN, thank you PMB for making such a reality.”

Ev Ans: “Since the money is not going to appreciate or depreciate then I don’t see the essence of this eNaira cause it’s going to be the same with a bank mobile app no difference anyway good work.”

Abdallah Mohammed: “At least, if it will reduce bank exploitation, it’s a welcome idea but I don’t see any difference with our money in bank accounts.”

In Conclusion…

The eNaira is surely considered a development as it will help to make payments faster, get access to direct exchanges and also reduce the CBN budget on printing fiat Naira amongst others.

But will it really solve the issue of financial inclusion? The eNaira is expected to be accessible by all Nigerians as everyone can download the app on their phones and register with their BVN. Is this not to say that the eNaira will still be for the intellectuals and the financially-inclusive as before? 

To get on board with eNaira, you need a smartphone, NIN and BVN. Majority of the people using smartphones are already financially included. They are the ones who transact daily via banking apps and USSD. What then happens to those who do not have a smartphone? Those who cannot operate a smartphone? Those who do not have NIN or BVN?

These and more are the questions this new development has been greeted with by Nigerians in the crypto ecosystem.

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