Commercial banks and other financial institutions in Nigeria have been ordered by the apex bank of the country to halt providing their services for cryptocurrency transactions again. This directive was contained in a circular here the Central Bank stated in explicit terms that institutions who fail to adhere to this directive would face regulatory sanctions. The apex bank had earlier issued a warning to these financial institutions in 2017.
According to the 2017 memo, the use of unregulated virtual currencies like cryptocurrency was prohibited because they were used for illegal activities like money laundering and also to finance terrorism in the country. The bank has now made a strict follow-up to its earlier regulation and ordered these institutions to immediately close accounts of individuals or firms that engage in crypto transactions.
The most populous African country is not alone in banning the use of crypto assets, India also recently proposed a bill that would lead to the ban of all “private cryptocurrency” in the country. The Asian country had earlier banned crypto transactions in its jurisdiction for two years before the ban was lifted by the Supreme Court of the country.
Nigeria’s Crypto Market to be Impeded by CBN Directive
The ban of crypto transactions by the Central Bank of Nigeria opposes what the country’s Securities and Exchange Commission’s (SEC) said about the digital assets. According to the commission, its intention is to regulate these assets in a way that it would not stifle innovations or hinder the use of technology. In essence the regulatory body wanted to create a fair and efficient market for cryptocurrency.
Nigeria’s crypto industry ranks behind only that of the United States in the world in the ranking of Bitcoin P2P markets. Top crypto companies, Paxful and BlockchainCom had also reported a surge in the numbers of their users in recent times. And during a youth-led protest against police brutality in the country, Bitcoin was accepted as a form of donation.
Thus, the growing crypto community is going to be affected by this new development.