Friday, February 26, 2021
pool-ads
Home Latest News Policy and regulation Nigerian Central Bank Says Its Ban on Crypto Accounts Is Nothing New

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

The Central Bank of Nigeria (CBN) issued a five-page statement Sunday clarifying its position on cryptocurrencies after a regulatory warning to local banking institutions on Friday sent shockwaves through social media. https://www.coindesk.com/nigerian-central-bank-says-its-ban-on-crypto-accounts-is-nothing-new

 
In Sunday’s statement, the CBN stated that Friday’s letter was only a reminder that cryptocurrencies were not legal tender in Nigeria, and was reiterating a position the bank has held since 2017, not imposing new restrictions on the industry. 
 
The statement said:
 
“It is important to clarify that the CBN circular of February 5, 2021 did not place any new restrictions on cryptocurrencies, given that all banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, not to use, hold, trade and/or transact in cryptocurrencies.”
 
As reported by Coindesk, the CBN sent a letter to local financial institutions on Friday, ordering them to shut down all bank accounts associated with cryptocurrency trading platforms. In response to the letter, crypto trading platform Binance and local electronic payment apps like Bundle halted deposits. Angered Nigerian crypto users took to Twitter and other social media platforms to express their displeasure.  
 
The press statement, signed by Osita Nwanisobi, Ag. director of Corporate Communications, goes on to list other countries that have banned its banks from dealing in cryptocurrencies and makes the claim that in China, “cryptocurrencies are completely banned and all exchanges closed as well.” 
 
While China has imposed a number of restrictions on crypto exchanges and users, it has not outright banned cryptocurrencies entirely.
 
It also noted that cryptocurrencies are issued by “unregulated and unlicensed” entities, and that crypto assets are volatile speculative assets that can be a danger to Nigerian users. 
 
“The very name and nature of ‘cryptocurrencies’ suggests that its patrons and users value anonymity, obscurity, and concealment,” according to the statement.
 
In the letter, the CBN assured that this stance will not inhibit the progress of the fintech sector in the country, or its payments ecosystems. The directive became necessary, it said, to protect Nigerians, including its youths from the risks inherent in crypto assets transactions.
 
The statement said:
 
“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 letter also indicated that the high volatility inherent in crypto assets posed a great threat to “small retail and unsophisticated investors” who stand to lose a lot.
 
“In light of these realities and analyses, the CBN has no comfort in cryptocurrencies at this time. It will continue to do all within its regulatory powers to educate Nigerians to desist from its use and protect our financial system from activities of fraudsters and speculators,” the statement said.
 

Subscribe to our newsletter

To be updated with all the latest news, offers and special announcements.

Sourcecoindesk

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -
magazine-ads

Must Read

6M noobs have bought coins on Robinhood Crypto already in 2020

0
 According to the company’s latest report, “Crypto Goes Mainstream,” more than three million new users purchased from Robinhood Crypto in January, with more than...