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Limitations of buying bitcoin in Nigeria, The CBN ban – How to overcome

February 12, 2021 · 5 min read
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The Nigerian market is riddled with many limitations that make it difficult for Nigerians to buy bitcoin. From issues of bank restrictions to government outright ban on crypto accounts, scams, Ponzi schemes, and many more, Nigerians are finding it difficult to have free and easy access to bitcoin and other cryptocurrencies. 

The central bank of Nigeria (CBN), is basically the general financial organization that controls and supervises all financial institutions in Nigeria which includes the banks, the Securities and Exchange Commission controls and supervises the country’s stock markets which include trades in shares listed publicly on the country’s stock exchange. 

Although cryptocurrency is growing at an unprecedented rate, it appears that these Nigerian financial institutions are still oblivious of its potential impact. Instead of putting legislation and regulations in place to make buying, selling, and ownership of bitcoin easy for the Nigerian populace, the CBN has proceeded to enforce a crypto ban law in the country. 

Let’s discuss the limitations in detail. 

Read about how to make money with crypto arbitration.

Limitations of Buying Bitcoin in Nigeria

  1. Regulation

In Nigeria, digital assets are not legal tender neither are they grouped as shares or Securities and presently, there are no rules or laws on how to buy BTC and trade digital assets.

The central bank of Nigeria doesn’t even acknowledge digital assets as a legitimate tender. Rather, it sees Bitcoin and other cryptocurrencies with skepticism. In 2017 the CBN released a guidebook cautioning that fraudsters could capitalize on the anonymity of trading digital assets provided to cause financial terror.

Bothered that the risks involved in buying Bitcoin and other cryptocurrencies in Nigeria would weaken the probity of the country’s finance system, the Central Bank of Nigeria’s restricted financial institutions from involving in digital assets in any form.

  • All financial institutions are required to make sure that existing clients that sell or buy Bitcoin and other cryptocurrencies have efficient anti-money laundering regulations in place. 
  • In a case whereby the financial institutions are not okay with the regulations the digital asset trading firms have in place, financial institutions must dissociate from such trading firms. 
  • Lastly, financial institutions need to quickly report any illegal trades by these clients to the NFIU (Nigeria Financial Intelligence Unit). 

This restriction, however, did not stop Nigeria from becoming the biggest crypto market in Africa. Recently, the CBN reiterated the law and has begun to enforce it. This reinforcement was probably sparked by the END SARS protest where protesters contributed money in Bitcoin to fuel the protests after bank accounts of protesters were frozen.

This reinforced ban caused a Nationwide frustration most especially among the Nigerian youth as many have seen Bitcoin and Altcoins as a form of Holy Grail, a way to better their lives by investing in it. In fact, Nigerian commercial banks have begun freezing bank accounts linked to cryptocurrency. 

The CBN prohibiting financial institutions in Nigeria from involving in digital assets in any form would definitely reduce the number of people who want to buy Bitcoin and other cryptocurrencies. However, is this what the country needs at this time when the rate of unemployment is ever increasing? 

Potentially, the most efficient way to regulate digital assets might be to group them under shares, which gives control to the Nigerian Securities and Exchange Commission. 

The question now is – ‘is this the end of cryptocurrency in Nigeria?’ The simple answer to the question is ‘Definitely NO.’ In this article, we will talk about a simple way to overcome this huge limitation. 

In the meantime, let’s check out 2 other limitations to buying Bitcoin in Nigeria.

  1. Unstable Exchange Rate

To buy bitcoin in Nigeria usually requires that you make payment in dollars to buy bitcoin and not Naira. Additionally, the exchange rate on exchange platforms is different from the standard rates used by banks and other financial institutions. Exchange rates depend on the platforms, demand and supply, and the buyers. Therefore, you need to be wary of this so that you don’t lose some money due to the unstable exchange rate.

  1. Bitcoin and cryptocurrency theft

The internet is filled with many scams and Ponzi schemes and the cryptocurrency community is not an exception to this set of unruly people. Due to its anonymous nature, scammers see it as an opportunity to steal from people because the transaction cannot be traced back to them. Traders lose money on some p2p exchanges that allow unverified buyers on their platform. For this reason, traders are advised to currently buy bitcoin only on secured and reliable Peer-to-peer platforms like Remitano. Remitano implements a secure Escrow system that ensures that the buyer and sellers enjoy a smooth trading experience devoid of scams. 

Your bitcoin is also at risk of theft by hackers. If you keep your bitcoin on an unsecured cryptocurrency exchange, you may wake up to the news that the exchange has been hacked and your crypto asset is gone. Many exchanges have been hacked in the past and billions of dollars worth of crypto assets were stolen. So, as stated earlier, make use of secure and reliable crypto exchanges. Remitano is an exchange that has stood the test of time.

One other way you can also lose your bitcoin is if you mistakenly transfer bitcoin to the wrong wallet address.  You have to be very careful and double-check all wallet addresses before you make any transfer.

How To Overcome The Limitations

Now that we have highlighted some limitations to buying bitcoin in Nigeria, it’s time to discuss how to overcome them. 

One way to overcome these limitations including the recent crypto ban by the central bank of Nigeria is to purhcase BTC from secure and reliable p2p exchanges like Remitano. With p2p exchange, you’re simply buying BTC from another Nigerian with the help of an escrow (Remitano) so that nobody gets scammed. 

After creating an account on Remitano, it takes only 4 steps to get Bitcoin into your Remitano wallet or any other wallet of your choice.

Step 1 – choose a seller.

Step 2 – Input the amount of BTC, you would like to buy.

Step 3 – Make payment into the seller’s account. At this point, Remitano has already locked the seller’s BTC so he can’t sell to anyone else.

Step 4 – As soon as the seller receives payment, the BTC is deposited into your account. 

It’s that simple!

Find out more information about the steps to buy BTC.

The Remitano platform offers several benefits to those interested in buying Bitcoin in Nigeria. Some of these benefits include; escrowed payments. This helps to lessen the risk of being defrauded, and also reduce increased exchange rates and transaction costs.

Another significant benefit of buying Bitcoin from Remitano is that it supports the banking system in Nigeria and the returns acquired from trading can be paid directly into your bank account. 

It is much easier and simpler to buy Bitcoin and also trade on Remitano. All that is required is for you to open an account with your email, verify your identity and you’re good to go!

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