BITCOIN breaks $40,000 again as CBN punishes investors   

Feb 6 (Lagos) - Bitcoin broke the $40,000 mark again this year as it rose more than 6% to $40,605 at the time of writing this article. 

The CBN stopped banks from participating in Bitcoin with a memo just this week that has a lot of traders angry on social media.

Let us take a look at what is going on. 

As we can see in the CBN letter/memo, they are reminding Banks that dealing in crypto currencies remains prohibited and that the Banks should close accounts of persons/companies transacting in cryptocurrencies or operating cryptocurrency exchanges in Nigeria. 

So it is not something that is new, this is more of a reminder from the CBN to Banks in order to make sure it is implemented. Many other countries have similar laws to protect general public from various forms of fraud that occur with crypto-currencies. 

It is already known that crypto-currencies can be used to finance illegal/money laundering/terrorism activities so there is some reasoning why governments are against them. It can also be used to fund protests against governments which is huge threat to democracies because it is difficult to track where the money in coming from. Governments are not able to track crypto-currencies and that threatens their financial systems in the long term, in fact many countries are already bringing their own digital currencies. 

Given the fragile nature of Nigeria's financial system, a weak fiat currency that keeps on weakening, this circular/memo should not come as a surprise. If this was not done, more and more people would simply use crypto-currencies as a way of life rather than the Naira which loses value frequently. 

A lot of people abusing the government on social media today fail to understand that crypto-currencies can lose value quickly and it can also lead to economic hardship. Currently the times are good but lets not forget when Bitcoin fell from 20K to 3K quickly. So Government is protecting people in a way. 

Unfortunately many young people (in herd mentality) in Nigeria saw BITCOIN as a way of preserving the value of their money because inflation is above 15%, banks no longer pay good interest on savings (thanks to CBN), treasury bills pay almost nothing (CBN again), and the frequencies of currency devaluations put the cherry on top of the cake of misery that must be eaten by the population. 

The CBN Governor (Photo with President) as we all know is an award winning personality. We wish him all the best and we all hope to see him win even more awards for his performance which is there for everyone to see. 

reporting for on Satuday, Feb 8 2021 from Lagos, Nigeria
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