Central Bank of Nigeria has warned Nigerians to be careful in trading in Bitcoin,Monero,Onecoin and other cryptocurrency. The Governor of CBN, Mr. Godwin Emefiele said those who are engaged in it do so at their own risk.
In January 2017, the Central Bank of Nigeria (CBN) warned Nigerians and financial institutions to stay away from virtual currencies that have attracted investment in payments infrastructure that provides new methods for transmitting value over the internet.
The CBN had reiterated that virtual currencies such as Bitcoin, Ripples, Monero, Litecoin, Degecoin, OneCoin among similar products are not legal lenders in Nigeria, thus any financial institution that transacts in such businesses does so at its own risk. As at the time of writing this report, bitcoin, a world known cryptocurrency, has continued to crash as investors globally are getting their fingers burnt.
After the bitcoin craze rose to a near-fever pitch in 2017, several investors and analysts this year are predicting more growing pains for cryptocurrencies over surge in speculations and governments placing ban. Interestedly, as bitcoin price has stagnated in the last two weeks, smaller digital currencies such as Ripple, Stellar and Tron have surged into the ranks of the largest cryptocurrencies by market capitalization. Bitcoin saw its highest value before the Christmas holidays when it reached the staggering price of just below $20,000 but valued at $14,815.88 as at last week, according to CoinDesk.
Checks by LEADERSHIP revealed that one bitcoin equals an estimated N6 million as at January 5, 2018 as more Nigerian youths on MMM are taking interest in investing in virtual currencies, bitcoin specifically. Financial experts have joined regulating bodies to discourage investors to buy and trade with bitcoin due to its incredible volatility.
Most of them are of the opinion it is a bubble ready to burst this year. They expressed that as governments tighten their grip, bitcoin prices will most likely fall, and perhaps collapse, though the timing is impossible to judge. Bitcoin seems too prone to illicit use and too vulnerable to government regulation to survive for the long term.
They hinted that, “contrary to the attestation of its proponents, bitcoin contains several flaws that foretell its eventual doom. “The crux of his argument is that once central banks begin to view bitcoin as a credible threat, governments will declare war on cryptocurrency and suppress it out of existence through hostile regulatory policies.”
One of the most highly-regarded economists in the US said that he believes the bitcoin price is in a bubble and will “likely burst” over the long-term, even if it continues to appreciate in the short-term. Last year, Nigeria key market regulating bodies, CBN, Securities and Exchange Commission (SEC) and Nigeria Deposit Insurance Corporation (NDIC) were increasingly vocal in warning investors about the risks of cryptocurrencies.