INVESTIGATION OF THE CBN CRYPTOCURRENCY BAN POLICY IN NIGERIA AND PUBLIC PERCEPTION.
CHAPTER ONE
INTRODUCTION
Background of the study
The general market and most financial markets have historically made large gains. Methods of trading commodities have also changed and adapted to market needs in this regard, with the goal of making business transactions as simple as feasible. Foreign exchange refers to the assets utilized to undertake a products exchange. Money is defined by most economists as a medium of exchange, capital, and savings. Money, in our opinion, is a means of exchange, yet we both agree to accept it. The merchant agrees to accept cash in exchange for the items, and the employee agrees to be paid for their efforts. Money, as part of the account, is a straightforward tool for identifying and transferring value. Money acts as a savings account, allowing us to save the results of our business when we use the correct tools. To put it another way, money helps us to keep the value of a work week while spending less money than if we worked a long, hard week. If not, how will we be able to pay for it later? For millennia, from the days of commerce to the days of commerce, iron ore and coins, gold and silver, the creation of contemporary systems and systems, as well as the growth of globalization, such as the manufacturing of cryptocurrency known as bitcoin and ethereum, have been ongoing. In each transaction, each type of currency plays an important function. However, as society and the market as a whole expanded, more complicated trade methods were required. A digital or real cash that uses encryption for security is known as digital currency. For security reasons, cryptocurrencies are difficult to deceive. The type of a coin that distinguishes it and is certainly the most appealing is its type; it is not issued by a central authority, making it vulnerable to government fraud or meddling. Cryptocurrency offers both benefits and drawbacks. The main benefit of cryptography is that it permits the exchange of money between the two parties via compensation; this exchange also facilitates the usage of public and private keys for security purposes. These transactions have low operating expenses, allowing consumers to avoid paying hefty fees at most institutions by using the internet. The potential of bitcoin payment system termination is a serious concern.
Despite the hazards, many regulators continue to view at cryptocurrencies as a way to generate money, push change, and be simpler than carbide,’ and they have lost the central bank’s and government’s control. There are 856 cryptocurrencies in total. The competitive cryptocurrency market, according to Gandal and Halaburda (2016), might be investigated for a variety of reasons. It is, at its core, a new market with an increasing number of competitors. It’s a good lab with well-defined and high-quality price and time data, as well as market capitalization. Bitcoin is the most valuable cryptocurrency, followed by Ethereum and Ripple, each worth billions of dollars.
Statement of the problem
The public announcement by the Central Bank of Nigeria on the policy to ban cryptocurrency trading in the country accompanied the early part of February, following the experience of the EndSARs demonstration in Nigeria. The CBN issued a circular urging financial institutions not to interact with or facilitate payments for cryptocurrency exchanges, which shocked the Nigerian crypto community. On Friday, February 5, 2021, the CBN delivered a letter to local financial institutions directing them to close all bank accounts linked to cryptocurrency trading platforms. Binance, a crypto-trading site, and Bundle, a local electronic payment service, both froze deposits in response to the letter. Cryptocurrencies are also issued by “unregulated and unlicensed” companies, according to the report. Many young Nigerians who engage in cryptocurrency trading are clearly dissatisfied with such a mandate, given the apex bank’s clout in Africa’s fast-growing financial sector. Many Nigerians have taken to social media to express their displeasure with the ban, using hashtags such as “No To Crypto Ban,” “Why Restrict Crypto Transx,” “No Way To This Restriction,” “We Need Cryptos,” “In Cryptos We Trust,” and others. Some cryptocurrency experts say the CBN’s attitude was discouraging to the industry’s growth. This CBN instruction has already heightened anxieties among a rising number of Nigerian users, including millennials and small company owners who use digital assets for payments and inflation hedges.
Objective of the study
The major goal of this research is to determine how the public views the CBN’s prohibition on cryptocurrency trading in Nigeria. The study’s objectives are as follows:
- Learn how people in Nigeria perceive the CBN’s cryptocurrency ban.
- Examine the public’s impression of the Nigerian central bank’s cryptocurrency ban.
- Determine whether there is a major difference in people’s views on the cryptocurrency restriction policy.
Research Hypothesis
In this investigation, the following hypothesis was tested:
H0: Nigerians have a negative public impression of the cryptocurrency ban policy.
HA: Nigerians have a favorable opinion on the cryptocurrency ban policy.
Significance of the study
This analysis will aid decision-makers in adjusting and formulating laws and policies to satisfy societal requirements and foster a positive relationship between government and society. This research will educate the public about the validity of cryptocurrency prevention policies that contradict their beliefs. This study complements existing literature on the subject and will be a source of information for students, scholars and researchers who may be conducting further research on this topic or related section.
Scope and Limitation of the study
The purpose of this study is to find out how Nigerians feel about the Central Bank of Nigeria’s (CBN) Cryptocurrency Ban Policy. Residents of Lagos, Nigeria, will be the focus of the study.
Insufficient funds, time, and the lack of relevant materials in this research subject were the significant constraints that the researcher faced while conducting this research.
Definition of terms
The term “public” refers to a group of people who have common interests or qualities.
The way something is regarded, comprehended, or interpreted is referred to as perception.
Cryptocurrency is a digital currency that may be used to buy goods and services, but it is secured by an online ledger and powerful cryptography.
A legal or informal prohibition of something is referred to as a ban. Bans are enacted to ban specific actions inside a political jurisdiction.
A policy is a set of principles intended to guide actions and produce sensible outcomes. A policy is a declaration of intent that is carried out through a method or protocol.
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