CBN Bans Cryptocurrency Activity in Nigeria

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CBN GOVERNOR


The apex bank on Friday issued a directive warning financial institutions in Nigeria to stop every cryptocurrency trading or faces sanctions. 


This directive is contained in a memo with reference no BSD/DIR/GEN/LAB/14/001 circularized by the Central Bank of Nigeria (CBN) directing Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs) and Other Financial Institutions (OFIs) to close accounts of persons and businesses who are using their systems for cryptocurrency trading.


The letter which was signed by two CBN directors - Bello Hassan, The Director of Banking Supervision, and Musa Jimoh, The Director of Payments System Management Department expresses more emphasis on the January 12, 2017 circular.  The circular referenced FPR/DIR/GEN/CIR/06/010 was one of the CBN circular released earlier warning the public and business on their financial involvement with the use of cryptocurrencies. Not just that, the apex bank have been showing its disdain for cryptocurrency


The letter reads: “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in crypto currencies or facilitating payments for cryptocurrency exchange is prohibited.


“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating crypto currency exchanges within their systems and ensure that such accounts are closed immediately.”


Memo from CBN

In a more clearer terms, dealers, traders and investors in any kind of cryptocurrency in Nigeria are not protected by law as the currencies are presently seen as illegal tender by the Nigerian government, hence, the prohibition.


 Digital currencies are traded on different exchange platforms that are not regulated all over the world. This makes it difficult for the Nigeria government to simply accept it usage in the country.


“Consumers may therefore lose their money without any legal redress in the event these exchangers collapse or close business.


“Members of the public are hereby warned that virtual currencies are not legal tender in Nigeria. Accordingly, we wish to caution all and sundry on the risks inherent in such activities,”the 2018 statement had read.

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