The Effect Of Cbn Cryptocurrency Ban On The Economy Of Nigeria

The Effect Of Cbn Cryptocurrency Ban On The Economy Of Nigeria

Chapter One

Preface

Background Of Study

The global fiscal system is no doubt embracing the current transition from physical currency to nearly virtual currencies through the medium of technology. This surge has steered in the birth of crypto currencies. Crypto- currency has been defined as a digital record- keeping device that uses balances to keep track of the scores from trading and that’s intimately known to all dealers. Some of the forms of crypto currencies include Bitcoin( BTC), Litecoin( LTC), Ethereum( ETH), Ripple( XRP), Bitcoin Cash, Neo, Iota, gusto, Qtum, Monero and Ethereum Classic. A cryptocurrency system is defined by two parameters plutocrat growth rate µ ≥ 0 and sale figure charge at a rate τ ≥ 0. Since the creation of Bitcoin in 2009, multitudinous private cryptocurrencies have been introduced. Since the arrival of cryptocurrency, it has been getting a lot of media attention, and its total request value has reached128.78 billion USD in 2019. It operates grounded on a technology called ‘’ Blockchain ’’.

According to Nakamoto( 2008), cryptocurrency is a peer- to- peer Electronic Cash System. The peer- to- peer system of cryptocurrency is erected on blockchain, therefore, allowing deals to take place between druggies directly, without any conciliator( Hameed & Farooq 2016; Grech, & Camilleri, 2017). It allows anonymous sale between parties and as similar, parties don’t know the true identity of each other( Dierksmeier & Seele, 2016). This may be necessary because, the entire details of the sale of every party on the cryptocurrency blockchain is intimately revealed to other druggies( Bech & Garratt, 2017). Unlike the traditional currency which is issued at interval determinable by the Central Bank of each country, cryptocurrency like bitcion are booby-trapped at a fixed allocation algorithm similar that the number of Bitcoins to be booby-trapped is halved every time.

Despite the pitfalls associated with this currency, the rate of its growth is amazingly benevolence and grueling . With its growth, Governments are thrown into dilemma. still the inviting benefits of cryptocurrencies has at as when accessible serve as an employment and fiscal occasion for the employed and jobless individualities. As it enables them to meet their individual fiscal requirements at ease More also, the presence of companies who deals with cryptocurrencies in developing countries as Nigeria creates further job occasion for its citizens, as job openings are open for the jobless citizens. These massive benefits has to an extent made impressing contribute to Nigeria frugality.

Nigeria, the mecca of West Africa’s frugality has remained stagnant over decades, It was latterly verified by the Central Bank of Nigeria( CBN) Governor, Godwin Emefiele and the Minister of Finance, Kemi Adeosun that Nigeria’s frugality was officially declared to be in a specialized recession grounded on the new trend numbers released. incontestably, the state of Nigeria frugality has dissatisfied the prospects of its citizens. As severance rate noway drops to a noteworthy point, affectation and currency devaluation came a diurnal script in the frugality( jaboen 2016). This devastated position of the frugality has at all times placed a challenge to the citizens as they seek palatable and unpalatable openings to achieve diurnal survival.

However the elaboration of cryptocurrencies has offered further than just survival occasion to the poor millions. maturity of Nigerians took advantage of this stupefying platform to over up the lapse or gaps created by poor frugality. Irrespective of all these as recited over, the Nigeria Government unprecedentedly placed a ban on the use and trading of cryptocurrencies in its frugality( nation) as blazoned on the 5th of February 2021. this unpalatable and unconsidered prosecutions still has left a certain effect, print, and perception on the citizens. therefore, this study seeks to identify, probe, and assay the effect of CBN cryptocurrency ban on the frugality of Nigeria.

Statement Of Problem

According to Aderonke Alex- Adedipe et al( 2021), Nigeria has the second largest cryptocurrencies request among other countries. Nigerians for an case in the last 5 times traded over$ 500 million worth of cryptocurrencies. still the central Bank of Nigeria released a ban on the trading of Crypto in Nigeria, as it instructed all marketable banks and other fiscal institutions to identify individualities who distribute in cryptocurrencies and close down their accounts. In the recent times, this have been the situation and challenge faced by the millions in Nigeria as numerous lost access to their accounts, others lost their jobs hence adding to severance rate, while several others who depend on crypto deals to meet diurnal requirements are left helpless( Pecarb 2021). The prosecution of certain drastic and unregorous public decision has the capability to make, ameliorate, and destroy the frugality of developed and uninhabited countries as whatever that affects citizens ’ finance will reciprocally affect the frugality( Zeback 1996). therefore, this study seeks to examine the effect of cryptocurrencies ban on Nigeria Economy.

Purpose Of The Study

The study majorly investigates the effect of cryptocurrencies ban on Nigeria Economy. Other separate objects include;

Examine the impact of cryptocurrencies on Nigeria Economy.

Identify the consequences suffered by the Nigerian millions as a result of the ban on cryptocurrencies.

Find out the extent to which this drastic prosecution affect the Nigeria Economy.

Exploration Question

What’s the impact of cryptocurrency on Nigeria frugality?

What’s the attendant effect of the ban of cryptocurrency deals in Nigeria on the frugality of the country?

What are the consequences suffered by the Nigerian millions as a result of the ban on cryptocurrencies?

To what extent does the ban on crypto deals affect the Nigeria frugality?

Significance Of The Study

The findings on this study will of immense applicability the Government body of CBN and the Nigeria Government entire on the attendant effect similar drastic action against cryptocurrencies deals. This study also well serve a source of information about cryptocurrencies and the profitable befits of the virtual currency. still this study will also serve as a source material for anyone who intents or carries out any study related to cryptocurrencies.

Compass Of The Study

This study covers the effect of cryptocurrencies ban by CBN on Nigeria frugality using four named marketable banks in Abuja as a case study.

Description Of Terms

Cryptocurrency this is a digital currency that can be used to buy goods and services, but uses an online tally with strong cryptography to secure online deals.

Frugality this is an area of the product, distribution and trade, as well as consumption of goods and services by different agents. In general, it’s defined’ as a social sphere that emphasize the practices, dialogues , and material expressions associated with the product, use, and operation of coffers’.

CBN The Central Bank of Nigeria( CBN) is the central bank and apex financial authority of Nigeria established by the CBN Act of 1958 and commenced operations on July 1, 1959

Government the political direction and control exercised over the conduct of the members, citizens, or occupants of communities, societies, and countries; direction of the affairs of a state, community,etc.