CBN sacks cryptocurrency trading in Nigeria

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The Central Bank of Nigeria (CBN) has directed Deposit Money Banks (DMBs) and other financial institutions to close accounts of persons who are using their systems for cryptocurrency trading.

This new directive comes days after Billionaire Elon Musk said that bitcoin was “on the verge” of being more widely accepted among investors as he expressed his support for the cryptocurrency.

Cryptocurrency, a virtual or digital currency that appreciates or depreciates on the whims of market forces has gained traction globally and in Nigeria, young people invest in the cryptocurrency world, buying and selling bitcoin and earn a profit.

In a statement signed by Bello Hassan, Director of Banking Supervision; and Musa Jimoh, Director of Payments System Management Department, the CBN said: “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for a cryptocurrency exchange is prohibited.

READ ALSO: CBN withdraws operating licenses of 42 Microfinance Banks

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

The CBN also declared that breaches of its directive will attract severe regulatory sanctions.

It is not the first time that the CBN would be showing its disdain for cryptocurrency. In 2018, the apex bank issued a circular to say cryptocurrencies are not legal tenders in Nigeria.

“For the avoidance of doubt, dealers and investors in any kind of cryptocurrency in Nigeria are not protected by law. Virtual currencies are traded in exchange platforms that are unregulated, all over the world.

“Consumers may therefore lose their money without any legal redress in the event these exchanges 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.

Other types of cryptocurrencies are Ethereum, Litecoin, Polkadot, Chainlink, Binance coin, Tether, etc.

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