Can a government regulate a financial relationship between two individuals?

[kingstep]

The CBN's new virtual asset regulations, which took effect on November 5, have introduced stricter licensing and oversight for virtual asset businesses in Nigeria. one detail that deserves attention is the Section 10.1.4 which excludes private transactions between two individuals where no third party facilitates or supports the exchange.

What this misses out is that Two people can independently agree to exchange Bitcoin for naira without needing an exchange or financial institution to approve the transaction and thus is not even a loophole; it is one of the fundamental promises of Bitcoin.

Bitcoin was built around the idea that people should be able to hold and transfer value without depending on central authorities and even though the  Governments can regulate businesses operating around it, it is different from controlling the network or requiring permission for every individual transaction.

My concern is whether as a Bitcoin community, we will defend that distinction and subscribe to the idea that every exchange of value must eventually pass through an approved intermediary. And if that’s the case, then what exactly are we decentralizing?

We should support laws that tackle fraud and protect people from abusive operators, but we should equally defend the right to transact freely. Decentralisation is not just something we celebrate when Bitcoin's price rises; it is a principle worth defending when regulation puts it to the test.

[Nathrixxx]

The CBN's new virtual asset regulations, which took effect on November 5, have introduced stricter licensing and oversight for virtual asset businesses in Nigeria. one detail that deserves attention is the Section 10.1.4 which excludes private transactions between two individuals where no third party facilitates or supports the exchange.

Before you go further, what they are saying here will grow against the expectations we have with the use of P2P, which means that they wanted you and I to operate under their own approved centralized platform for any crypto related activities we are going to be doing, which is impossible for someone like me that understand better why I should stay away from centralized platform or any central authority to control my asset for me, the agenda is to remain a third party and influence any financial transactions you are going to be doing henceforths, now left for us to decide on weather to remain private or subject ourselves to this government for their manipulations to continue over us.

[Fivestar4everMVP]

CBN is clearly ignorant, it is disheartening to see a financial institution as big as the Central bank of Nigeria with lots of learned personels simply making a fool of themselves, they obviously think that Crypto is just or is like the fiat system where they can easily gain control over and run its affairs as it pleases them.

I am not going to talk about the part where they said companies behind dollar-pegged tokens must maintain a balance of #15 Billion naira in paid capital to allow the company operate in Nigeria, and naira-pegged token, a balance of #10 Billion in paid-up capital.

The part that actually threw me off is the part where they said even non-custodial wallet companies must acquire license to be able to operate in Nigeria, and again, they (CBN) must approve all p2p transaction amongst Nigerians, this is funny, and i cant help but ask myself how exactly they plan to achieve this? i trust the crypto community in Nigeria anyway 

[obuoma]

This new regulation will affect mostly local crypto startups. But the good thing is that such regulation will help more people to come forward and do their business legitimately unlike before that people are not motivated to register companies as crypto startups because of unclear regulation. It seems this new development exempt P2P transactions but there is the part that tend to encourage people to trade P2P without a third party and that will expose people to rhe risk of scam.

[Antidote47k]

Certainly they can’t monitor a transaction carried out privately without an escrow or exchangers, but that’s brings us to the matter of trust, the two individuals would need to trust themselves before such exchange can take place.
Exchangers and escrows can provide dispute resolution and some protection against dishonest counterparties, they lower the bar for being scammed of your coin by a large stretch.

We need to understand that two individuals privately agreeing to exchange is quite different from platforms matching buyers and sellers and I don’t think the regulation is targeting the former cause this section 10.1.4 distinguishes purely private bilateral transactions from platform facilitated p2p services. We can see that platform services requires additional responsibility hence the regulatory oversight.

[Biirakedee]

Well I understand why some people prefer to use exchanges because it definitely gives some level of protection when you deal with strangers but still it doesn’t mean that everyone should use them. Two people who knows and trust each other should be able to agree on a transaction without having to need a third party to get involved in it.
And for those who trade privately, it’s important to know the rush involved because there maybe nobody to help if one person refuses to keep their own side of the agreement but I don’t think that risk alone is enough to reason to take away the freedom to transact directly.

[Opiate32]

If I want to sell my bitcoin to someone who is willing to buy it, why should that require to get an approved third party. Though it does not mean people should be free to use private transactions to commit fraud  but we should be very careful not to make ordinary p2p transaction unnecessarily complicated .

Bitcoin already gives people the option to transact without depending on any middleman. If we start to make this option hard to use, are we not taking away one of the very thing that makes bitcoin valuable in the first place?