Many Nigerians have been wondering if cryptocurrency is legal in Nigeria?
This is a question that is on the minds of many people, who are interested in investing their money into this type of digital currency in Nigeria.
Cryptocurrency is a type of digital currency that is not controlled by any government or financial institution. It is transferred between peers without the need for an intermediary, such as banks. Cryptocurrencies are becoming more and more popular in Nigeria.
However, it is unclear if they are legal in Nigeria due to laws surrounding them being vague at best.
In this blog post, I will try to help you understand whether cryptocurrency is legal in Nigeria or not.
Is Cryptocurrency Legal in Nigeria Today?
Yes, Bitcoin and other cryptocurrency or virtual currencies are legal in Nigeria today. But, the use of cryptocurrency as a means of payment or investment instrument in Nigeria for all business and personal transactions remains prohibited by Nigerian law.
The Central Bank of Nigeria is the sole issuer and regulator of Nigerian fiat currency the Naira. It is illegal to use any other form of virtual or cryptocurrency as a means for payment in Nigeria, including Bitcoin.
You can buy bitcoins and other cryptocurrencies but you cannot sell them on websites that operate here in Nigeria because it is not legal tender in this country.
As of 17 January 2017, The Central Bank of Nigeria (CBN) has passed a circular to inform all Nigerian banks that bank transactions in bitcoin and other virtual currencies have been banned in Nigeria.
On 5 February 2021, The Central Bank of Nigeria (CBN) issued a circular informing financial institutions in Nigeria that sequel to their circular in January 2017, dealing in cryptocurrency or facilitating payment for the same remains prohibited and would attract a stiff penalty.
So, in essence, what this means for Nigerians is that they can buy bitcoins and other cryptocurrencies they desire for it would be legal for them to do so.
Let’s take a look at some good cryptocurrencies to Invest in today…
Top 20 Cryptocurrencies to Invest in Nigeria
I know many of you will be curious to know what my best cryptocurrency to invest in Nigeria?
Well, cryptocurrency is legal and can be used around the world. It’s been a while since we have seen cryptocurrency being discussed on mainstream media but it is back as many of you are now looking for ways with cryptocurrency trading
All this been said, my best and favorite cryptocurrencies to invest in as a Nigerian although it’s not financial advice are shown below:
- Bitcoin (BTC)
- Binance Coin (BNB)
- Cardano (ADA)
- Ethereum (ETH)
- Terra Virtua Kolect (TVK)
- PancakeSwap (CAKE)
- Shiba Inu (Shib)
- Litecoin (LTC)
- Polkadot (DOT)
- Stellar(XLM)
- Monero(XMR)
- Bitcoin cash (BCH)
- TRON (TRX)
- Solana (SOL)
- Matic Network (MATIC)
- Doge
- Axie Infinity shards (AXS)
- ThorChain (RUNE)
- Zilliqa (Zil)
- Chiliz (CHZ)
This is the list of some great projects that I would recommend to invest in cryptocurrency as a Nigerian.
Although, This is not financial advice and I will also advise you always do your own research (DYOR) before investing in a crypto project.
If you are wondering if investing in cryptocurrency is a good idea, but the answer to that question would boil down to your risk tolerance levels and not much else since there are no guarantees when it comes to investments of this nature.
The cryptocurrency market has been growing steadily for the past ten years with more cryptos being launched every day and available from different exchanges around the world.
If you would like to buy or trade cryptocurrency in Nigeria then it is best that you look at the following exchanges:
- Binance (most popular crypto exchanges globally)
- Kraken
- Cryptopia
- Localbitcoins.com (Pairings: BTC/NGN, ETH/NGN, LTC/NGN)
- Luno
- Cex.io
- Quidax
- Paxful (P2P)
- Remitano (P2P)
- NIGEX Exchange
Following the CBN crypto ban in Nigeria, most of these exchanges have paused deposits and withdrawals in Naira.
The use of debit and credit cards is also not allowed for users in Nigeria.
There are also a few tips to note before trading on an exchange, and some of these include::
There are also a few tips to note before trading on an exchange, and some of these include:
- Invest only what you can afford to lose;
- Expect volatility, as the cryptocurrency market moves with the law of supply and demand, and can be very sensitive to a lack of liquidity or external financial, political, and economic pressures;
- When using an exchange, do not forget to activate safety mechanisms like biometric verification and two factors authentication (2FA);
- If you are a long-term holder of cryptocurrencies, it is advisable to remove your coins from exchanges if you want to claim complete sovereignty over them.
There are safe offline wallets that allow you to hold your private keys, providing an extra layer of security. Once you buy crypto assets from an exchange, transfer them to a private wallet, preferably a hardware wallet.
Is Cryptocurrency regulated in Nigeria?
At the moment cryptocurrency is not regulated in Nigeria.
This is likely to change in the near future, and cryptocurrency may be regulated like other assets.
Some experts think cryptocurrency will soon become legal tender in Nigeria as it’s a great way to avoid government interference, which often leads to corruption with fiat currency.
The Security and Exchange Commission (SEC) has revealed that it is working with the Central Bank of Nigeria (CBN) for a better understanding and regulations of cryptocurrency in the country.
This is coming after the Central Bank of Nigeria (CBN) ban in February 2021, barred bank money deposits and other financial institutions from doing business and transactions related to cryptocurrency and other virtual assets.
Nigeria has not yet taken a position on cryptocurrency regulation. At the moment, cryptocurrency is not considered legal tender in Nigeria;
However, this does not mean that it cannot be used at all.
The Nigerian Central Bank has said, “there are risks associated with virtual currencies for investors and they may have negative consequences on national economic security as well.”
From my research been gathered Nigeria will soon regulate cryptocurrency since Nigeria is likely to have its own central bank digital currency (CBDC) by the end of the year, an official with the Central Bank of Nigeria (CBN) has said.
In his remarks following the bankers’ committee meeting, Rakiya Mohammed, who is the director of information technology at CBN, also revealed that this “digital currency would be accessible to all Nigerians.
So I believe with all this going on, cryptocurrency will soon be regulated in Nigeria, just that it will only take time for this to be achieved.
Do Nigerian banks accept Bitcoin or any type of Crypto?
No, Bitcoin or any type of cryptocurrency is not acceptable in Nigerian banks.
A few months back Central Bank of Nigeria (CBN) issued a circular asking commercial banks and other financial institutions to close accounts transacting in or operating on, cryptocurrency exchanges.
All deals involving cryptocurrency are now “prohibited” with “severe regulatory sanctions” awaiting erring outfits.
The CBN also asked banks to identify “persons and or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.
The latest crackdown by Nigeria’s central bank on cryptocurrency has elicited outrage and confusion in a country where the virtual currency has boomed in the last five years.
It’s also emblematic of the struggle by financial regulators the world over to regulate the supercharged space of digital currencies.
We hope that soon there will be some form of regulated cryptocurrency for use in banking institutions as well as public spaces such as ATMs with exchanges etc.
How can I buy Bitcoin legally in Nigeria?
You can only buy Bitcoin in Nigeria through crypto exchanges.
On how to buy Bitcoin in Nigeria, it’s pretty easy. A couple of years ago the reverse was the case but with platforms like Paxful and Binance, buying Bitcoin in Nigeria is seamless.
You can start buying Bitcoin with little funds and can fund your account with either your debit or via bank transfer.
Note: Due to CBN regulations, deposit via debit card is now temporarily suspended, you can deposit and withdraw via the P2P section of Binance, it is easy and fast. Once you sign up and verify your account, just go to the P2P section.
Can you buy crypto with a credit card in Nigeria?
Some people might be wondering if they can buy Crypto with a credit card in Nigeria, and the answer to that question is No.
Due to Central Bank of Nigeria (CBN) regulations, buying of cryptocurrencies via debit card is now suspended in all the platforms and financial institutions that support it.
However, you can deposit and withdraw via the Peer to Peer (P2P) section of platforms or exchanges that support P2P like Binance, Paxful, and many others, it is easy and fast. Once you sign up and verify your account.
Is Coinbase legal in Nigeria?
No, Coinbase is not legal in Nigeria because it does not have regulatory approval from the Nigerian Central Bank (NBC).
According to NBC, “no company or individual is permitted to offer a digital currency exchange service” in Nigeria.
The main reason for this regulation is that cryptocurrencies are not legal tender in Nigeria.
There’s no country-specific law on Bitcoin and other cryptocurrencies yet
Coinbase is currently available in 102 countries but not all of them are supported on the exchange platform. Nigeria is not even listed among the 13 African countries supported.
However, you can only store, send/receive your crypto with Coinbase if you are in Nigeria but cannot buy/sell.
Is Binance legal in Nigeria?
Yes, Binance is Legal in Nigeria.
Binance is the cryptocurrency exchange platform where you can trade Bitcoin, Ethereum, and a host of other cryptocurrencies in Nigeria with ease and security. You can access it through an app on your mobile phone or computer browser (Chrome, Firefox).
You only need to register for a trading account using e-mail or social media login like Facebook etc., verify your identity by uploading a photo ID document like a driving license/passport and then fund your Binance wallet that supports crypto from any cryptocurrency wallet before you commence buying cryptocurrency pairs with P2P due to the CBN ban on cryptocurrency.
How can I sell my Bitcoin in Nigeria in 2021?
For you to sell your Bitcoin in Nigeria, first, you need to convert it into USDT or NGN if you want.
You can do this by selling or swapping your Bitcoin on a crypto exchange like Binance or Paxful then go to the P2P section to be able to sell it.
Can I convert Bitcoin to cash in Nigeria?
Yes, you can convert cryptocurrency to cash in Nigeria.
You need to buy cryptocurrency from any cryptocurrency exchange and convert it into USDT or NGN before going for peer-to-peer transactions then make the conversion using a bank account linked with your P2P profile.
What is the future of cryptocurrencies in Nigeria?
The future of cryptocurrencies in Nigeria is unsure. It’s not illegal, the Central Bank has been careful to remain neutral on cryptocurrency as it grows and evolves but government officials have warned citizens against investing in them.
Cryptocurrencies are still in the early stages of development.
Like any other financial instrument, cryptocurrencies could be used to preserve wealth and grow it over time.
Cryptocurrency has an exceptionally strong upside potential when compared with traditional asset classes like stocks or commodities because they can appreciate much faster than them as seen in the 2017-2018 bull market for Bitcoin.
It is very difficult to predict the future of cryptocurrency and whether or not its legal status will change but one thing we know for certain, crypto assets are here to stay.
Crypto-assets may have a variety of uses: from being used as an investment tool
The cryptocurrency market is dynamic, and it’s difficult to predict how things will play out.
For now, cryptocurrency in Nigeria can only be exchanged for other cryptocurrencies or fiat currencies like USDT or NGN on exchanges that support peer-to-peer (P2P).
Is Bitcoin or Cryptocurrency taxable in Nigeria?
No, Bitcoin is not taxable in Nigeria.
The cryptocurrency industry is not regulated in Nigeria.
It isn’t considered a commodity or currency by the country’s regulators, which means it doesn’t come with any of those protections.
As such, cryptocurrency exchanges aren’t required to adhere to know-your-customer (KYC) policies and cryptocurrency transactions are anonymous because they don’t go through banks that have KYC processes for their customers.
This lack of regulation also makes cryptocurrency hard to tax.
Is Cryptocurrency banned in Nigeria?
Yes, Cryptocurrency is banned in Nigeria
The Central Bank of Nigeria issued a ruling on February 5 2021 instructing all financial institutions to stop the facilitation of cryptocurrency transactions.
The circular goes further and asks any regulated entities in their system to identify individuals or organizations engaging with cryptocurrencies, and shut down those accounts immediately if found guilty.
In order to mitigate the impact of the Central Bank’s directive, many crypto-based Fintech companies have remodeled their operation by implementing P2P models on their platforms.
This new model allows traders to connect directly and thus avoid going through banks as a third party for trades.
Nigerian cryptocurrency exchanges are unregulated at the moment, but this doesn’t mean that cryptocurrency trading is automatically illegal in Nigeria.
Is trading in cryptocurrency legal in Nigeria?
Yes, Cryptocurrency trading is legal in Nigeria.
In as much as, the Central Bank of Nigeria had warned Nigerians to be wary of the risks associated with virtual currencies.
In addition, it also said that those who are found guilty will have their accounts closed.
But is this enough to stop crypto trading in Africa’s largest economy?
Nigerian crypto exchanges are unregulated at the moment and so trading cryptocurrencies isn’t illegal but not yet regulated by law either.
The new model has allowed Fintech companies like, Binance, Remitano, Paxful, Coindirect, and BTCXO among others to operate without banks as a third party for trades.
Cryptocurrency traders should make sure they’re aware of what they need before embarking on digital currency transactions.
Cryptocurrency trading isn’t regulated by the Nigerian government at all; they only require to Know Your Customer checks (KYC).
This means that there are no regulations on how much money Nigerians can invest or deposit into cryptocurrency exchanges when buying cryptocurrencies.
Is investing in cryptocurrency legal in Nigeria?
The Nigerian government has not made any statement on the legality of cryptocurrency as of yet, so it is up to individual investors as to how they want to invest and trade with cryptocurrencies.
Investing in cryptocurrency is legal but the Nigerian government has not given cryptocurrency exchanges their approval yet.
It is therefore advisable for people who are thinking about investing or trading in Cryptocurrencies should get informed first before making a decision because there can be consequences.
Is mining cryptocurrency legal in Nigeria?
The answer to the question Is mining cryptocurrency legal in Nigeria? is still unclear because it’s not regulated by any central bank or authority.
To date, regulatory bodies have been slow to react and are still getting their heads around how they should be dealing with digital currencies such as Bitcoin which can be legally exchanged for cash.
This means that there isn’t a specific set of rules governing Nigerian bitcoin traders or miners who use cryptocurrencies.
Is buying and selling cryptocurrency legal in Nigeria?
It’s legal for Nigerians to purchase or sell cryptocurrency, but the Central Bank of Nigeria has warned against it.
The Nigerian Financial Intelligence Unit and National Security Adviser have been warning about cryptocurrencies with a view that they could be used in criminal activities such as money laundering, funding terrorism, tax evasion, and fraud.
There are no specific regulations governing cryptocurrency exchanges which means there is virtually no regulation on how transactions are carried out between buyers and sellers who meet each other online.
Anyone can buy and sell cryptocurrency as long there are no restrictions imposed by the federal government of Nigeria.
There are also concerns about cryptocurrency being used for illegal activities such as money laundering and terrorism financing – which is why authorities aren’t currently allowing people to purchase goods with cryptocurrency even though it is legal to own them.
Central Bank is considering making cryptocurrency legal in order to support the country’s economy. “Central bank of Nigeria (CBN) has just announced that it will be regulating Bitcoin and other Cryptocurrencies,” CBN said on Twitter.
CBN intends to provide safety against cybercrime so as not to give room for fraudsters.
This move means more people can buy goods and services without having to convert cryptocurrency into Nigerian Naira, and then buy goods.
Cryptocurrency is quite a future-oriented technology that will help a country’s economic development.
Is Cryptocurrency Legal in Nigeria – Final Thoughts
The Nigerian Central Bank is the only institution that has specific laws in regard to cryptocurrencies.
Nigeria’s central bank, The Central Bank of Nigeria (CBN), issued a statement on January 11th warning Nigerians against investing or trading in digital currencies like bitcoin for fear of fraud and lack of consumer protection.
In addition, if they do invest in them it would be seen as an illegal activity with penalties including imprisonment and fines according to CBN guidelines.
The bottom line is this.
Cryptocurrency is legal in Nigeria.
With everything been said, You can buy and sell cryptocurrency on some Platforms that’s support P2P, and some of these platforms are as follows:
- Binance
- Paxful
- Roqqu etc…
you can get started by signing up for crypto exchange platforms supported in Nigeria.
In conclusion, Is Cryptocurrency Legal In Nigeria? Yes! It Is! And there are no restrictions if you want to trade crypto coins or invest in them with all your heart and soul because they’ve been around for years now so be bold my friend.
