CBN Bans Cryptocurrency Trading in Nigeria

CBN Bans 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.

A cryptocurrency is a virtual or a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions.

The CBN directive is contained in the circular dated 5th February 2021 signed by Bello Hassan, Director of Banking Supervision; and Musa Jimoh, Director of Payments System Management Department, warned and reminded local financial institutions against having any transactions in crypto or facilitating payments for crypto exchanges.

“Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in crypto currencies or facilitating payments for cryptocurrency exchange is prohibited.

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

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The Central Bank added that “breaches of this directive will attract severe regulatory sanctions.”