Central Bank of Nigeria Bans All Cryptocurrency Transactions In Nigeria

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The Central Bank of Nigeria has informed banks within the country to stop processing cryptocurrency transactions. This was revealed in a letter sent to banks on February 5, 2021 and made available to FXCryptonews. 

Banks to Close Accounts of Customers Dealing In Cryptocurrency

The apex bank cited a 2017 circular issued to banks regarding the dangers of cryptocurrency and bitcoins. The Central Bank further stated in the letter that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges was prohibited in the country. 

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It also directed all financial regulatory bodies in the country to identify persons and entities transacting or operating cryptocurrency exchanges within their systems and close accounts immediately.  Concluding the letter, the Central bank threatened to sanction banks and financial services that fail to adhere to the new policy. 

A Major Blow To Crypto Adoption

Nigeria is regarded as the biggest bitcoin market in Africa, with a huge demand for cryptocurrencies in the country. Many youths buy and sell cryptocurrencies as a form of business while others hold crypto-assets as a hedge against the falling local currency ‘’Naira.” 

The Central Bank’s decision to prohibit crypto transactions within banks is a huge blow for the crypto space in the country. There had been suspicions from the crypto industry that a draconian policy could be in the making. 

A meeting between the a representative of the CBN and a crypto association body SIBAN in December had ended in disagreements with both parties. This latest directive means that thousands of bank accounts could be closed in the coming weeks. 

Nigerians Enraged with the Decision

The apex bank’s directive to financial operators has enraged many youths who have turned to Twitter to vent their anger. Popular Twitter personalty Wale Adetona tweeted that the order was taking Nigeria backward 

While Japheth Omojuwa tweeted that the directive showed that the government is still in the stone age. 

Cryptocurrencies have already spread extensively in Nigeria’s major cities, and the new directive may only foster more youths to accumulate cryptos.