The Central Bank of Nigeria (CBN) released a five-page statement on Sunday clarifying its stance on cryptocurrencies, after a regulatory notice sent to local banking institutions on Friday sparked social media panic.
The protest of Nigerians on social media prompted the bank to clarify its position
In Sunday's statement, CBN said Friday's letter was just a reminder that cryptocurrencies are not legal tender in Nigeria and was reiterating a position the bank has held since 2017, without imposing any new restrictions on the industry.
"It is important to clarify that the CBN circular of February 5, 2021 did not place any new restrictions on cryptocurrencies, given that all the banks in the country had previously been prohibited, through the CBN circular of January 12, 2017, not to use, store, exchange and / or transact in cryptocurrencies, ”the statement said.
CBN sent a letter to local financial institutions on Friday, ordering them to close all bank accounts associated with cryptocurrency trading platforms. In response to the letter, the Binance exchange and local e-payment apps like Bundle have stopped deposits.
- Investors Crypto Nigerians have taken to Twitter and other social media platforms to express their discontent. The press release, signed by Osita Nwanisobi, director of corporate communications, goes on to list other countries that have banned banks from trading cryptocurrencies and states that in China "cryptocurrencies are completely banned and all related exchanges too".
In fact, although China has imposed a number of restrictions on cryptocurrency exchanges and users, it has not completely banned cryptocurrencies. The release also states 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 name itself and the nature of 'cryptocurrencies' suggest that its customers and users value anonymity and concealment," the statement said.
Nothing new
In the letter, CBN assured that this stance will not inhibit the progress of the fintech industry in the country, nor its payments ecosystems. The directive became necessary, he said, to protect Nigerians from the risks inherent in cryptocurrency transactions.
“Due to the fact that cryptocurrencies are largely speculative, anonymous and untraceable, they are increasingly being used for money laundering, terrorist financing and other criminal activities,” the statement said.
The letter also stated that the high volatility inherent in crypto assets posed a great threat to "small retail and less experienced investors" who risk losing a lot.
“In light of these realities and analyzes, CBN has no solace in cryptocurrencies right now. It will continue to do everything in its regulatory powers to educate Nigerians to desist from its use and protect our financial system from the activities of scammers and speculators, ”the statement said.
