Bitcoin business is now becoming popular in Nigeria. So, most likely you have heard or read about it and you are thinking of going into legitimate Bitcoin investment. You can buy Bitcoin in Nigeria and trade it, or you can mine for them. In this article, we are not going to talk about Bitcoin business in Nigeria itself, we will discuss its legal status. So, what's the stance of the Central Bank on Bitcoin mining in Nigeria?
What is Bitcoin?
Bitcoin is a worldwide electronic currency and a digital system of payment. It is known as the first decentralized cryptocurrency because it works without a single administrator or central repository i.e. no government, bank, company or individual owns or controls it. The Bitcoin was designed by a group of programmers under the alias Satoshi Nakamoto and was released online as an open source software. Bitcoin can be used in any country and anonymously because Bitcoin wallet doesn’t use your identity and a new one can always be opened easily.
Is Bitcoin mining or Bitcoin investment in Nigeria legal?
The legality of Bitcoin mining differs from country to country and it is still changing or undefined in many of the countries. Although the majority of the countries have not branded the use of Bitcoin as illegal, many of them have varying regulations on its use as money. While some countries have restricted or banned the usage of Bitcoin, others have allowed its use and trade.
On the 17th of January, 2017, the Central Bank of Nigeria, issued a circular notifying all Nigerian banks that they have banned all bank transactions in Bitcoin and every other virtual currency in Nigeria. However, in the course of the year, the Deputy Director of Banking and Payments System Department of the Central Bank of Nigeria, Mr. Musa Itopa-Jimoh clarified the memo and the stance of the CBN on Bitcoin. He explained that the Central Bank, cannot regulate or control Bitcoin because they do not own it. He likened it to the fact that no one is going to regulate or control the Internet because they do not own it. He also noted that they are only trying to discourage people from using it and that they should avoid the risky business on crypto currencies that are now becoming popular in the country.
He further explained that the Central Bank together with the Nigeria Deposit Insurance Corporation (NDIC) later set up a committee to see if Nigeria can adopt the technology driving Bitcoin and other digital currencies. The committee has since then submitted its findings. Different sub-committees are currently working on the issue.
So we can deduce that Bitcoin mining has not been declared illegal in Nigeria. Also, bitcoin is not the same as Ponzi scheme as misunderstood by some people. If you will go into legitimate Bitcoin investment, make sure you know how to mine Bitcoin. It is a good store of value but a very risky one.
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