Months after the Central Bank of Nigeria (CBN) published a letter in February banning regulated institutions from handling Bitcoin, peer-to-peer (P2P) trading in the country has increased by 27%, according to data from Analytics Platform useful tulips.
The ban was a consequence of an earlier CBN circular from 2017, which warned institutions and the public of the risk associated with transactions in cryptocurrency. With the letter of February 2021, the CBN made it clear to the regulated institutions that “trading in cryptocurrencies or facilitating payments for the exchange of cryptocurrencies is prohibited”.
However, the CBN has not restricted citizens’ use of Bitcoin, as reported by local media agency Today NG. This subtle difference, coupled with the decentralized and uncensored nature of Bitcoin, has enabled Nigerians to bypass the exchange ban and resort to pure P2P solutions such as Paxful and LocalBitcoins.
As a decentralized P2P e-cash system, Bitcoin is not easily bent by the rules of authoritarian governments. Nigerians have proven that banning banks and exchanges from participating in Bitcoin does not undermine the network, it strengthens it.
As Parker Lewis has shown in two essays, Bitcoin is anti-fragile and cannot be banned:
“The Bitcoin ban is a piece of cake. Some will try; everything will fail. Attempts to ban Bitcoin alone will accelerate its adoption and spread. It will be the hundred mph wind that fuels the devastating fire. It will also make Bitcoin stronger and more reliable, further protecting it from attack, and reinforcing its anti-fragile nature. “