There seems to be a contingent of young African people with a profound lack of understanding of how things work in the real world, who latch onto whatever new trend Bay Area libertarians think of as the new cool thing, as a platform on which African economies can bypass government control and begin to get things done. Crypto is a big example of this. Cc the vast array of crypto companies popping up across SSA.
EndSARS protesters in Nigeria shifted to accepting public donations via Bitcoin last October when the government instructed financial institutions to shutter accounts with them through which donations were being received.
The government allowed only a few months to pass before banning cryptocurrencies in the country 4 months later in February of this year, by instructing financial institutions to sever ties with crypto companies.
What this meant was that crypto companies could no longer have accounts with banks, making it difficult for them to buy cryptos from users (how can you instantly pay users for cryptos bought from them if you cannot operate a bank account as a company?) Or sell to them, since there's usually a low monthly FX limit ($100) on debit card transactions on individual local bank cards on foreign services.
I initially thought – that because cryptocurrencies are not normal goods with ends of their own, they are financial instruments (medium of exchange, unit of account, store of value) like stocks, cash, bonds, land – they needed licensing and regulating by a financial agency of the government, placing them under threat of their operating licenses being pulled if they refused to dance to the tune of the government. I believed this was the heavy hammer. This doesn't seem to be so as I have seen no specific mention of this in the press.
So it seems the inability by crypto companies to hold bank accounts of their own is what has affected their operations.
There are two ways crypto trading has usually worked:
(i) An incorporated commercial crypto company — with all the trust, legitimacy and accountability that may come with that — buying and selling cryptos to and from its users.
(ii) A P2P system where random strangers interact with one another, a seller and buyer agree on a price and conduct business between themselves. In this situation, there usually needs to be an escrow to mediate the relationship and hold a potential defrauding party accountable for their actions. If crypto companies who could serve as escrows in these transactions are banned meanwhile, then things begin to break down.
"Banning cryptos" by instructing financial institutions to sever associations with crypto companies meant existing crypto companies could no longer be (i) above. They couldn't work as escrows like in (ii) either.
This predictably results in the rise of only a few trusted individual P2P crypto 'merchants' who... yup can be easily picked off.
There are people who think smart tech can overcome bad governments. Not true. Never has been, never will be. Tech is a tool to be used by whoever is in control.
Government power is king. Government power, which includes everything in the government's power to getting things done: legislative regulation, prosecutorial authority, plain enforcement by a threat of violence etc