Topic: Confirmed NGN banks blocking account, what could be the outcome on the economy? (Read 329 times)

Poor government with poor management that’s what you can say here mate. Nigerian government already stated in the press conference that their reserve bank has seen tremendous devaluation in the Nigerian Currency due to increased use of cryptocurrency.

Considering the country is already underdeveloped and don’t seem to progress much with proper city planning, roadways, housing and more it is BUT OBVIOUS that government would not want the money to flee away across the border in the form of crypto.

You can't be sure about this because even accounts used p2p were banned with the suspicion and there is no solid evidence from the both side to prove anything but still banks have the upper hand because it is centralized and you trusted them and agreed their terms of usage.

If you are in Nigeria and you want to trade crypto without being traced it is better to use P2P binance exchange it's more secure and safe and in fact there are many buyers and sellers on binance P2P platform, say no to government and crypto haters, you can't be stopped

Hmmm I think they are only going to block accounts that are found with crypto activities after the ban has been declared. But if the activities on your account are past activities, I don’t think they are going to do anything to you. So, just chill. And moreover since centralized exchanges are no longer going to work there, you no longer have a problem with them.

This time around if you want to trade you’re going to have to make use of decentralized exchanges in Nigeria, it’s possible that there are many of them that will be available there, like Paxful, Binance DEX and the rest of them. And this time around anyone trading cryptocurrency in Nigeria has to be careful and also keep it secret.

I know of other countries virtual and online banking system but there are security requirements to prevent another citizen from opening a bank account in another country like in the US you must have your SSN number  to open an account while in Nigeria you must have a BVN number to open both virtual and offline bank. A citizen from Nigeria cannot open a bank in the US (Online or Offline) without the SSN number. Are you Estonian? I may like to know how this work.@elkaka22

Especially considering you are a huge known person in the crypto world, I didn't even know you had anything to do with these bans affecting you. I know that you must be making a decent money compared to other people in your nation, even if you are not "wealthy" you are probably doing alright for yourself, and that should make it even harder for you to handle all these transactions while there is a ban, because you would be under a lot of suspicion when you get that much money.

However peer2peer may not really be that easy considering all the people who will want to get a good cut. What I can suggest you is try to find nations you can open an account with, like Estonia had online applications for example, with that you could technically move your exchange accounts to your other nations bank account and they will allow you to get crypto and fiat and you could just move that banks money and wire that to your own banks account.

Already I don't hold Naira, so won't be affected that much if my account is been frozen. When ever I need fiats that's when I withdraw my profits to Naira therefore there's never a high amount of funds in my account except those needed for urgent needs. Before now I used the centralized mode of transacting which involve me withdrawing directly with the Binance third party service but after the ban I switched to the peer2peer system.

As I said before the poor banking services was one of the reasons I avoided this features but that's the only choice right now to trades my crypto to fiats and staying under the radar. For the moment I think I'm safe because I had to visit my banks few days bank to clearify some transaction that got reverse but not crypto related.

I didn't get questioned irrespective of my account been very active still trading bitcoin. The transactions still have been coming in although there's no tag to link them to crypto trading.

There is also P2P that will never be ceased to exist, it will always be there. Obviously speaking it is not going to be easy, but if there are people with accounts in foreign nations that allow bitcoin trading, they will always try to get bitcoin from you and give you cash or get cash from you and give you crypto and they will use that money to trade on exchange at other banks nation and they will profit from these transactions.

Is this worse for people who can't find anything else then p2p? Of course it is, they have to use those people and there is no other way now, but at least we can say that it is not impossible to trade there, it is totally doable. This is why I believe it is quite important that we manage to help those people by allowing them to trade with crypto or work with crypto and have some sort of freedom on other exchanges without banning them to participate in big exchanges.

It will affect their economy not the people who involved in the cryptocurrency market for sure because people will find new way to convert their Bitcoin to fiat which may not necessarily the need of bank accounts then its revenue loss for government so they are encouraging the black market activity more with auch stupid idea. But I guess this ban is not going to last long because the similar ban by Indian Central bank got cancelled by their supreme court last year.

This is the dumbest thing any Government would bring up, if this should be the criteria then everybody accounts would be closed down because people make huge transactions on a daily without dealing in crypto.

All these transactions are p2p based and no bank will invite you as long as the amount is in line with CBN maximum daily deposit for individual and corporate accounts and money laundering act. You only get question to answer when you cross those rules. Till then you're pure Anonymous

Question to CryptopreneurBrainboss:

Knowing that you are under a magnifying glass, what are you planning to do or have already done? Have you withdrawn already all the funds from your bank account to prevent them being frozen? Have you found already a bank to substitute your current one ? In other words - do you have a Plan B if this situation affects you?

P.S. If the banks know you are involved with cryptocurrency and gaining income from your business, is it available just to pay income tax from your deeds and they will leave you alone? 

You clearly did not read what @stompix explained to you. In a year they can go through their database and identify transactions from random accounts if they want and if it is huge amounts you will be asked to provide the source of income for those transactions. So it is not a clear cut easy solution as you think.

There will be always a loophole if you are having business oversees and it is not a big deal but the problem will be for normal traders.

What connection does this have to do with the other Meta discussion, Yes there are over 1m Nigerians on BTT both active and inactive accounts I need someone to come up with a better statistics both active and inactive users like I said before I'll eat crow if I'm wrong(in satoshi's voice)

You are not getting the point most of these people didn't open an account just to buy crypto. In Nigeria the first aim of every bank account holder is to save their money, for instance I opened my bank account 2013, I started using my bank to buy crypto 2016. That being said and agreed upon, the statistics might be too big or small but the fact remains that Nigerians are growing much in crypto space and most of the local banks were already unbanked, this was one of the few reasons the CBN frown at it and placed some restrictions. Nigerians are also in Ponzi scheme, and other stuffs.

Then you don't really know Nigerians that much, this CBN bank-crypto restrictions didn't start this year it had been there for the past 5 years but the penalty was different( the penalty was that should in case of any unsuccessful transactions the bank will not be held responsible and will not partake in any investigation, you buy at your own risk)


Nigerians are the smartest people on earth when they want to do something they can never be caught, everybody shifted to p2p, I've been doing transactions for the past weeks no problem and my bank account is still active.

When incidence like this occurs, the economy suffers greatly directly or indirectly; if you watched the news last night; Nigeria inflation hits an all time high of 20.57% which does not even speak the reality as there are inflation in fuel prices as of today. Also international bodies are seeing how banks close up accounts without following legal proceedings, investors are leaving the Nigeria market; and fdi is nothing to write home about.

The outcome honestly; is unfair on citizens.

Another ridiculous claim like the one about 1 million Nigerians having an account on bitcointalk?
You need a reality check and I'm happy to give you one.


So what?
3 times the sales in smartphones mean three times more players for CandyCrush?
10 times more condoms sales mean 10 times less porn watched?
Maybe people are opening bank account because they need simply need a bank account for other stuff, not for crypto, let alone the simple fact of bitcoin from being a bank killer turning into something that requires a bank account, ironic.

But let's look at the numbers right?
So 44 million bank account involved in crypto in Nigeria.

- Paxful:
Ups, only 1.3m accounts! Accounts!
Remember that there are 3 million bitcointalk accounts and 250k active users, but let's leave it like that.

Localbitcoin:
Obviously less than Paxful and with a 10 million per month volume even 1 million users would lead to an average of 10$, so it would be safe to assume the real number is probably 10 times less, but let's stick to 1 million.

Luno:
Claims 5.4 million accounts worldwide.
Now with the volume of $68,741,823 that would mean Binance with $21,660,485,831 would have 1.5 billion.
So in reality those accounts would be a few hundred thousand and only a part of them in Nigeria. But let's stick to 5 million.

So you still have 37 million to go, and I assumed no accounts on multiple platforms so the majority of all that is left must be on Binance.
Let's get over the fact that Nigeria doesn't lead the number of accounts on Binance, Binance itself claims there are only 100 million cryptos users in the world, and no, all of Africa is the lowest market by a number of users from all regions except Australia.

So 40 million Nigerians opening a bank account just to trade crypto? No, that's bs!
But look at the bright side, actually two bright sides:

1) If the numbers are as I speak there is ten times more place to grow.
2) It's far better to think there are only 1 million maximum users from Nigeria. If you were 40 million and the government would close your bank accounts with zero protests on the streets, it would also mean you have some extra 40 million sheep who only know how to obey!

Less keyboard patriotism more real-life action, right?

Noo noo please don't give me this Nigeria is the second leading active users on Binance, Luno, Paxful, Localbitcoin..etc. Nigeria has about 111million citizens with an active bank account and I'm very sure 40% of those  accounts are being used for crypto. There must be a drop in GDP don't tell me otherwise

Unfortunately the true fact is that if banks are not allowing anything like this, it is all gone, and you have to accept that it will be dead in a very quick matter. However reality is that there are banks that blocks accounts yet there are banks that not only support it, but also invest into crypto as well.

So, we can't say that every bank has an approach, some banks are looking at it like it is a good thing and some of them are looking at it like it is a bad thing, there is really no official situation just yet.

I personally think that the best way to go would be helping banks realize what they are missing out, all crypto people that uses those banks could get their money out of that bank and move to another bank and as a reason you could write "not friendly towards cryptos" and that bank may realize that they have done a mistake that way because all banks care about money in their accounts.

That's like people from the tobacco industry claiming they bring up 10% of the GDP, and if people stop smoking will they burn their money not spend on cigarettes or spend them on something else? How many Nigerians had bank accounts only for transacting cryptos? And don't come with the million numbers cause you all know it's not true.


Let me be the bearer of bad news, despite all that cultists are shouting every second.

If (!) and here is the big IF,  they want to shut down all trading, including p2p done via banks they can do this in a matter of days.
People have the wrong impression that by sending individual payments via banks they can obfuscate what that payment is about, it makes sense the first moment but not so much the second one.

I've traded for a while on LB, I was making like 100+ transactions to different people a month, guess how many I've made since I quit? 1 or two a year!
Banks can simply run a query on their database to see who does 50+ a month to different people (not family, not owning a business, not declaring income) and in a few seconds, they have all the names of individuals that might deal in crypto and as a bonus other suspicious activities.
Check if those accounts interlink themselves, check the sums, check the (whatever IRS version you have for individual revenues)  and here you have them, a matter of a few days of work, and you probably have identified 90% of the traders in the country that use banks and with a click annihilate them.

There is no hiding in a centralized system with an activity that stands out this much!
If they want (Again, big IF) to enforce and totally cripple trading they can, the only thing they can't stop would be face2face transactions, but that's like returning to the stone age, and the risk of getting acquainted with an undercover cop is the cherry on top.

The way out of this is not finding ways to avoid the ban, trying to weasel the way out but change what is wrong in the first place, the legislation.
If you allow them an abuse the next one will be just around the corner.

Maybe they think crypto could be a double edged sword more specifically for developing country economy where the money could escape from the countries' economy easily through the use of crypto but I don't honestly think that's enough justification to limit their citizen of their own right to own asset like crypto.
Sometimes country take a step that doesn't make sense at all it's confusing.

Another dumb move from a central bank.

The ban will be completely non-enforceable and will simply create more alternative trading platforms other than regulated ones.

This is precisely what happened with the RBI's ban on cryptos. All they did was wipe out a significant portion of the regulated crypto industry, whilst driving people to P2P platforms such as LBC. This will be no different.

At this point, the Nigeria government are scared of the massive unity among her youths who's with the recent agitations could unseat any government. So they feel they've been sponsored and gets their donations via bitcoin which is quite anonymous; on this note, they decided to limit banks from involving in any crypto transaction since it's the primary source of buying a Bitcoin. Looking at the economy impart of the ongoing closure of bank accounts involved in crypto activities as directed by the CBN I think the economy sustainable development of any bank depends on their customer's investments.
e.g

If bank A had 2million customers paying monthly ATM maintenance fees of N54.2k
That's 2m x N54.5 = N108,400.000m

Now if the same bank should lose 500 customers due to the CBN regulations ;

1.5m X N54.2 = N81,300.000m

That's some huge percentage % drop right here which would eventually affect the stock markets also and the country GDP.

Nigeria government should always look at the economy, social impart before taking an acidic decision, everything shouldn't be seen as political.

The reason for the ban is the lies that cryptocurrencies are used in illicit deals and that transactions can not be traced, not because of any other reason. If there are other reasons it was declared banned, maybe further shady on the government side. Stocks are not affected. I do not think investors will lose faith in the governments but crypto dealings will still be very active. As Nigeria is so active in crypto dealings. After central bank of Nigeria declared it illegal, bitcoin and altcoins at the point saw a rally while bitcoin even hit all time high.

I wonder why countries like Nigeria and India are so anti-crypto?
What will be the benefit of banning all crypto activities in those countries?The crypto businesses located in Nigeria and India will move into other locations and hide their revenue,instead of paying taxes to the Nigerian and Indian governments.
Fighting scammers/criminal is the most popular reason for having strict anti-crypto rules,but it is proven that cryptocurrency bans can't stop crypto scams.
Legalization and liberalization of the crypto industry and all fintech is the way to go.

That was expected to happen since Nigeria has decided to ban bitcoin and other crypto related activities! So people will have their funds frozen, they will face legal actions and some of them will end up in jail! That's how a failed government would want to do while they can't create any new opportunities. India will soon see similar things happening as Indian government has also decided to impose a blanket ban on crypto related activities. This is the mentality of dictatorship around the world.

It's sad to see that governments consider bitcoin as a threat rather than an opportunity. That's the problem with politicians and policy makers because they are under huge pressure from the banking lobby. It makes no sense but still it is happening! Some more regressive countries will soon be added to this list in 2021.

The thing is that the Nigerian government has failed to provide resources or loans to small scale businesses, neither have they provided employment to their teeming youthful population, it looks somewhat like a misplaced priority just outrightly banning the use of crypto for no reason without addressing some of their pressing economic issues.

Having said that, Nigeria is also backward in technological advancement, neither do they have any plans in motion to launch something like a CBDC, what I'm saying is, it looks like the government is firing at the wrong target, as i really cannot understand what the Nigerian government stands to gain with this ban looking at how quickly crypto adoption is growing in their shores and could be another escape route for so many people to escape poverty, and by extension boister their economy.

The activities of the bank and government will definitely affect the youths and the Nigerian economy. It is a wrong step by the Nigerian government.

It is going to push the economy backwards by at least 20 steps backward. The reason that it have huge set back is that institutions who would have wanted to transact or build products in Nigeria because of easy payment system with PayPal and bitcoin will not do so any more. Youths that are contributing by trading and making money that still goes back to do economy inform of capital projects, feeding of families, gift to friends and trying to introduce more friends, all will seize to happen. It is a wrong selfish move.

That is a really bank dependent country, in my country, the only thing that you need when you get a job is to apply for government insurance and have them get a cut in your salary, and the rest can be taken OTC in the accounting department of the company. If your name is ever involved in something that the bank doesn't want to get involved in, they have the ability to freeze your account although closing will not be possible. They need the paper trail of your account so closing it might be a problem for them. What Nigeria does to its crypto businesses closing their accounts is a declaration that they do not want to do anything with cryptocurrency because they know the threat it poses of people becoming their own bank.

In my country having a bank account is basically mandatory, it's where you get your salary, where the government sends money if you have kids, etc. I don't think a bank could close your account like that. But just in case, I have several bank accounts, and my main one for the salary etc., is not used for crypto stuff.

It's really fair. You can use your bank accounts to transfer funds to stocks brokers but you cannot use it to deal with cryptocurrencies. It's like they're dictating you on how and where to use your money. Although we know that it's only a matter of time before this crackdown happens, I feel that it's pretty sudden to impose it without the users knowing. When we knew that finally, the Africans are now catching up to crypto, Nigeria shuts it down and closed accounts with some deposits in it, too.

The largest bank in Russia is Sberbank. The bank has one more popular system ЮMoney (formerly YandexMoney). They prohibit their clients from using to make cryptocurrency exchange transactions through their services. I recently changed cryptocurrency. Users now mark these payments as a regular transfer or transfer money to the account through an ATM. The gray market is growing, the laws don't work.

"Be your own bank." Is a common BTC motto and theme. One nigerian central banks have apparently decided to test.

The question is whether nigerian banks provide a valuable and irreplaceable resource to nigerians. Or whether their industry is non essential and can be replaced by progressive & emerging technologies.

If nigeria can replace every service central banks provide with crypto and localbitcoins. Their ban may not be very effective. It could even hurt their business due to negative publicity and public sentiment.

I think this is against human rights, if someone has dealt with crypto-currency when there was no ban on it, and then there was a ban, their account can't be freezed on account that they dealt in crypto-currency before the ban, well am in Nigeria and I haven't heard of such complaint, but there is nothing too petty that Nigerian government can't do. I think such ban would affect many that has found self employment from crypto-currency in a country that job are scares, and people like me would had started to use crypto-currency as a way to see ourselves through life's problem and ends meet, it's just wicked for my government to take such stand.

This is not a good news for our economy (Nigeria). I don't know why Nigeria always like to be the last to explore a beneficial technological trend such as the blockchain and the cryptocurrency.

I read in another Tweet on the 11th of February 2021 that the Senate has summon the governor of CBN, Godwin Amiefele, to answer some questions regarding the probable impact of cryptocurrencies to the economy and why the ban.

At a time like this when Kenya had provided regulatory guiedelines as regards crypto and express their support for it, Nigeria is still sleeping.

Hmm...

The circular will increase the numbers of the unbanked. Traders will withdraw their money which means less liquidity for the banks. That also means they have less money to roll in their lending business or other investments [less income].

I don't know if news on crypto will also affect the stock market. Are you thinking traditional investors will lose faith on the government or will they trust it more as a result of the decision?

I hope that it will not be the case for you @CryptopreneurBrainboss, you have a lot of transactions in cryptospace but I would bet on the fact you won't be affected because AFAIK about this issue, the only ones that gets a crackdown from are the businesses but not the individuals. The only problem with this is that you might be affected because government doesn't seem to discriminate businesses from individual when it comes to this kind of things, I hope that you can find an alternative to stay in cryptospace. In my opinion, this will hurt the economy because Nigeria is the leader when it comes to user growth followed by Australia and Spain. I will drop the link of the user growth for proof.

Story trending around the web is that, the banks in Nigeria has started carrying out the directive of the Central Bank of nigeria to close all accounts found to be transacting with the cryptocurency industry. Evidence has been posted on twitter which includes, email sent by the banks, chat with customer care etc indicating that their account has been shutdown due to their involving with the not regulated industry.


Well, I haven't seen any citizen affected physically, the evidences online are quite convincing which got me wondering if I'll be next since my account has crypto involvement all over due to my kind of business and I bank with both banks in the forefront of this exercise.  Now I'm trying to understand what this news will have on the Nigeria economy and the stock market understanding that this development must be targeted at certain companies or individuals opposing the government.