The top bank classified financial crimes, electronic piracy, and the possibility of digital currencies losing their value as severe threats. The central bank of Sudan stated that cryptocurrencies pose legal dangers in the country because they are not categorised as money or even private money and property under the rules of the republic. Furthermore, CBOS highlighted that the money has substantial cover and is not issued by recognised or accredited authorities that legally bind them, and that it had seen a global pattern of encouraging currency trading on social media.
According to the Brookings Institution, Africa has the fastest-growing cryptocurrency sector among emerging nations and is the world’s third-largest expanding market. According to Chainalysis’ 2021 Global Crypto Adoption Index, Kenya, South Africa, and Nigeria are among the top ten cryptocurrency-using nations in the world. However, not all African nations are welcoming to cryptocurrencies.
According to a survey by the United States’ Library of Congress (LoC), 23 of the 51 nations that have banned cryptocurrencies are African. While four African governments, Algeria, Egypt, Morocco, and Tunisia, have outright prohibited the use of cryptocurrencies, 19 countries, including Nigeria, Africa’s largest economy, have imposed implicit limits on digital assets.
When the Central Bank of Nigeria ordered commercial banks in Africa’s largest democracy to close all cryptocurrency-related accounts in February 2021, it effectively banned cryptocurrencies in the country. According to the directive, all regulated financial institutions must identify people and/or companies engaging in or running cryptocurrency exchanges or facilitating payments for cryptocurrency exchanges and immediately cancel their accounts.
The Nigerian Securities and Exchange Commission, the country’s financial market regulator, would subsequently establish a fintech branch to investigate all crypto-related assets and products in order to determine the viability of building a regulatory framework.
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