Cryptocurrencies have taken a prominent place in the global financial landscape. Ever since the number one currency (Bitcoin) was created in 2009, all cryptocurrencies’ global market capitalization has grown above $1.5 trillion and it keeps growing sporadically.
Although cryptocurrencies are still not a legal tender in many countries, the spontaneous rise in their value has contributed to their growth and increasing adoption among the populace as a medium of exchange and an asset of value.
Recently the Central Bank of Nigeria (CBN) issued a circular prohibiting banks and other financial institutions from facilitating crypto transactions.
In defending its ground, CBN says;
The speculative and anonymous nature of cryptocurrency has made it a tool for illicit fraudulent activities such as terrorism financing, tax evasion, and online money laundering.
However, from accurate research, it is known that financial crimes have been existing in the country before the emergence of cryptocurrency.
Therefore fiat currencies have always remained the most used form of financial crimes.
Thenation noted that, according to an excerpt from Chainalysis 2021 report, about 2.1% of all cryptocurrency transactions in 2019 were illicit.
These numbers further fell to 0.34% in 2020. This is far lesser when put side by side to the numbers from fiat currencies. According to the UN, 5% of the global GDP is in direct use for illicit activities.