Blockchain Technology and Trade Implications of Cryptocurrency Ban in Nigeria
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2022-12
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Lead City University
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The CBN on the 5th of February 2021 through banks and other financial institutions stated that dealing in crypto currencies and facilitating cryptocurrency exchange are prohibited with effect from 5th February 2021. The CBN argued that there is anonymity and lack of KYC, which made cryptocurrency susceptible to illegal use, thus contradicting the existing laws and crypto’s are not legal tender. This study, therefore aimed to analyse the implementation and acceptability of digital currency and study the trade implications of cryptocurrencies ban in Nigeria. Theoretically, this study is anchored on Liberalism with Realism and Constructivism as a counter-argument theory. The study employed descriptive survey research design and the population of the study was made up of 165 bankers, university lecturers and crypto traders. The sampled all respondents using a purposive sampling technique and the data were gathered with the use of structured questionnaire. The Statistical Package for Social Science (SPSS) was used to analyse the data and the presentation was done using tables and descriptive analysis. The findings revealed that the ban on cryptocurrency was majorly due to its susceptibility to financial crimes, easily used as a medium for tax evasion and it is devoid of proper regulation. Further, the ban on cryptocurrencies forced some financial technology start-ups into liquidation while other financial technology companies were forced to lay off their staff because of poor capital inflow due to the ban on cryptocurrency. The study concludes that there is a positive and significant impact of cryptocurrency ban on the development of digital currency in Nigeria. However, the ban on cryptocurrencies has a negative impact on Nigerian digital currency traders. Therefore, this study recommends that the Central Bank of Nigeria to consider developing regulatory policies on the usage and trading of cryptocurrencies instead of an outright ban.
Keywords: Blockchain Technology, Cryptocurrencies, Cryptocurrency Traders, Nigeria
Word Count: 296
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Kate Turabian