The Central Bank of Nigeria, (CBN) has directed Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs) and Other Financial Institutions (OFIs) to identify persons and/or entities transacting in or operating crypto currency exchanges within their systems and ensure that such accounts are closed immediately.
This was contained in a letter dated February 5, 2021, jointly signed by the Director of Banking Supervision, Bello Hassan and Musa Jimoh, Director Payments System Management Department, and addressed to all Deposit Money Banks, Non-Bank Financial Institutions and Other Financial Institutions.
The letter further referred back to the Central Bank of Nigeria’s (CBN) circular of January 12, 2017 ref FPR/DIR/GEN/CIR/06/010 which cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs) and members of the public on the risk associated with transactions in cryptocurrency.
“Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited”, the letter partly read.
The apex Bank stressed that breaches of this directive will attract severe regulatory sanctions, adding that the letter is with immediate effect.
A cryptocurrency according to Investopedia.com is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
Many experts believe that blockchain and related technology will disrupt many industries, including finance and law. Cryptocurrencies face criticism for a number of reasons, including their use for illegal activities, exchange rate volatility, and vulnerabilities of the infrastructure underlying them.
