The government of Africa’s largest oil exporter, Nigeria, has issued a warning to its citizens about the use of cryptocurrencies, stating that the said currencies are not backed by gold or any other precious minerals and therefore are not recognized as legitimate by the Nigerian Central Bank(NCB).
According to Business report Nigeria(BRN), this is not the first time a warning was issued.
“various government agencies in Nigeria have cautioned citizens on the new form of money.”
These were the words used by Adikwu Igoche, an executive at the Nigeria Deposit Insurance Corporation (NIDC) when speaking at the 29th Enugu international trade fair on Friday the 23rd of March. He also cautioned that citizens of Nigeria should only transact via financial institutions that are “insured by NDIC,”.
This news is not at all surprising, many other countries from the European Union and the Arab Emirates have warned their citizens about the dangers associated with Initial Coin Offerings (ICO) and investing in cryptocurrencies. Countries like China have gone and fully cracking down on the trade. In Nigeria’s case, its a lot less drastic. However, it is important to note that in 2017, the use of cryptocurrencies grew by almost 1500%.
This thought to be a result of the countries depleted foreign exchanges. The situation might not be too far off from Zimbabwe, a country which once had the highest Bitcoin prices as locals rushed to it as a store of value. Access to financial institutions in Africa and other underdeveloped regions has historically proven difficult and nonexistent in many instances. Add to that a mixture of bad governance and valueless fiat currencies, as in the case of Zimbabwe, it seems that digital currencies could provide some form of relief to the unbanked.
Whether or not Nigerian citizens will heed these warnings remains to be seen. Whether or not the Nigerian regulators will stop at mere warnings also remains to be seen. It is said that in Nigeria, the most interest in BITCOIN and other cryptocurrencies comes mostly from the middle to upper class, who likely have a better understanding of the underlying technology and its potential, than the average man on the street.
That said, I like to believe that dogs bark at moving cars. Governments all across the globe are talking Bitcoin and crypto, so this vehicle must be moving, otherwise, they’d just pee on it right?