Nigeria’s apex bank reiterates warning over Bitcoin exchanges in Nigeria

Nigeria’s Apex Bank has once again warned banks and payment companies to restrict customers’ access to bitcoin exchanges in Nigeria, The Nerve gathers.

This action may come on the heels of reports that digital currency is once again valued at more than $1,000 USD and may continue to increase in value this month following buying from China and India, as investors look to shield themselves from currency devaluations and cash shortages.

According to reports, Bitcoin has also flourished thanks in part to some of the uncertainty raised by the election of Donald Trump in the U.S and the vote in Britain to exit (Brexit) from the European Union single market. Bitcoin demand has also grown in China, which is playing a large role in the crypto-currency’s rise in value.

According to sources at the Apex bank, the bank has sent notifications to financial institutions in the country to reiterate their stance on the use of virtual currency. While there have been no big policy punishment for defaulters, the Nigerian Government seemed more determined in its efforts to enforce that policy.

The reminder may be an attempt to curb growing enthusiasm for digital currencies by IT vendors, and ponzi schemes asking their subscribers to start investing with digital currency the nerve gathered.

It will be recalled that the Nigeria Government through the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Commission (NDIC) had set up a committee to investigate the growing trend of bitcoin use, with indications that it could be adopted, as part of measures to tackle growing inflation in the country, before it completely barred the country’s financial institutions against bitcoin’s legality last week similarly to the earlier warning by the Nigeria Stock exchange.

The statement reads: “The attention of bank and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation or decision by the CBN.

“Ensure that you do not use, hold, trade and/or transact in any way in virtual currencies. Ensure that existing customers that are virtual currency exchangers have effective capital AML/CFT controls that enable them to comply with customer identification, verification and transfer, monitoring requirements. Where banks or other financial institutions are not satisfied with the controls put in place by the virtual currency exchanger/customers, the relationship should be discontinued immediately.

Any suspicious transactions by these customers should immediately be reported to the Nigerian Finance Intellignece Unit (NFIU).

The CBN reiterates that VCs such as bitcoin, ripples, monero, litecoin, dogecion, onecoin, etc., and similar products are not legal tenders in Nigeria.

Thus, any bank or institution that transacts in such businesses does so at its own risk.”

However a group of researchers from the University of Pretoria South Africa yesterday published a report on how bitcoin can be used to hedge uncertainty towards the global fiat economy towards the development of African countries.

The findings of the researchers emphasize the importance of decomposition of bitcoin’s returns into different investment horizons and they also highlighted the essential role of utilizing estimation methods which use information derived from quantiles of both global uncertainty and bitcoin’s returns.

Adopting a Wavelet-Based Quantile-in-Quantile Regressions, Elie Bouri, Rangan Gupta, Aviral Kumar Tiwari and David Roubaud, pointed out that Virtual currency can help global fiat equity markets, particularly when the market is exhibiting bearish or bullish patterns and also when global uncertainty is either high or low.

“Short-horizon investment in Bitcoin can help investors hedge global  market uncertainty, especially when the market is functioning in bear and bull regimes and also when uncertainty is either low or high. “