Nigerian Central Bank Says Its Ban on Crypto Accounts Is Nothing New

The Central Bank of Nigeria (CBN) issued a five-page statement on Sunday clarifying its position on cryptocurrencies after a regulatory alert to local banking institutions on Friday sent shockwaves through social media.

In a Sunday statement, CBN said Friday’s letter was just a reminder that cryptocurrencies are not legal tender in Nigeria, and reiterated a position the bank has held since 2017, not imposing new restrictions on the industry.

“It is important to clarify that the CBN circular of 5 February 2022 does not impose any new restrictions on cryptocurrencies, given that all banks in the country have previously been banned, through the CBN circular dated 12 January 2017, may not be used, detained, traded and/or transacted in cryptocurrencies. , “

said the statement.

CBN sent a letter to local financial institutions on Friday, ordering them to close all bank accounts associated with the cryptocurrency trading platform. In response to the letter, crypto trading platform Binance and local e-payment apps like Bundle stopped deposits. Angry Nigerian crypto users took to Twitter and other social media platforms to express their displeasure.

Press statement signed by Osita Nwanisobi, Ag. The Director of Corporate Communications, went on to list other countries that had banned its banks from conducting cryptocurrency transactions and made the claim that in China, “cryptocurrency is completely banned and all exchanges are closed as well.”

Although China has imposed a number of restrictions on crypto exchanges and users, it has not completely banned cryptocurrencies.

It also states that cryptocurrencies are issued by “unregulated and unlicensed” entities, and that crypto assets are volatile speculative assets that can be a hazard to Nigerian users.

“The name and nature of ‘cryptocurrency’ demonstrates that its customers and users value anonymity, obscurity and concealment,” the statement said.

In the letter, CBN assured that this attitude would not hinder the progress of the domestic fintech sector, or its payment ecosystem. The directive is important, he said, to protect Nigerians, including their youth, from the risks inherent in crypto asset transactions.

“Due to the fact that cryptocurrencies are largely speculative, anonymous and untraceable, they are increasingly being used for money laundering, terrorism financing and other criminal activities,” the statement said.

The letter also states that the high volatility inherent in crypto assets poses a major threat to “small retailers and unsophisticated investors” who will lose a lot.

“Given this reality and analysis, CBN has no comfort in cryptocurrencies at the moment. It will continue to do all within its regulatory powers to educate Nigerians to stop using it and protect our financial system from the activities of fraudsters and speculators,” the statement said.

Read CBN’s full statement below:

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