The Central Bank of Nigeria has issued a directive urging all financial institutions in the country to act immediately to immediately block bank accounts of digital currency-related activities.
To Report “The Block” In this circular issued on February 5, it is stated:
The central bank reminds all financial institutions that any participation in activities related to digital currencies or the provision of payment services to exchange offices in this area is prohibited.
In another part of this circular, we read:
Accordingly, all financial institutions, including deposit banks (DMBs), non-bank financial corporations (NBFIs) and other financial institutions (OFIs) are required to authenticate individuals and legal entities active in the field of digital currency trading in their systems. It must also immediately freeze the bank accounts of these individuals. It is warned that violation of the provisions of this directive will result in severe penalties and deprivations.
Nigeria-based digital currency exchange companies have responded to this directive; However, the practical steps of each of them to implement the provisions of this directive have been different.
Changpeng Zhao, CEO of Bainance Exchange, wrote in a tweet in response to the circular:
Bainance has received news from its partners that it will be affected by the issuance of a Central Bank of Nigeria directive suspending bank accounts related to digital currencies, all deposits and withdrawals in Nairos (Nigerian currency with the abbreviation NGN). More details will be announced soon. To avoid possible problems, remove your nerves as soon as possible.
Zhao writes in another tweet:
Nigerian banks are likely to stop cooperating with digital currency exchanges.
He went on to predict that the issuance of such directives could lead to a further boom in the peer-to-peer exchange market.
It is worth mentioning that Bainance Exchange has stated in the official announcements in describing the situation:
Bainance will temporarily suspend Nigerian currency deposits from its partner channels from the morning of February 5, 2021. But withdrawals from accounts with this currency will continue to be normal, however, finalization of withdrawals from accounts may take a little longer. We apologize in advance for any problems in this regard.
Officials at Nigeria-based BuyCoins also tweeted:
We are fully aware of the provisions of the new Central Bank of Nigeria directive and will do our utmost to work with regulators to ensure that our services comply with the legal framework. All transactions on our platforms go through their normal routine and users’ assets are safe.
Luno, another London-based exchange, has said it will continue to operate normally until further notice. The announcement of this exchange states:
Some deposit methods in the form of Nayra are affected by this directive, so it is best to check the status page for updates. However, impressions are not disrupted and are still being processed. All customer assets are in complete security.
Today’s directive of the Central Bank of Nigeria is in line with the policies previously issued by the Bank in 2017 around the axis of digital currencies. The policies warned against the misuse of digital currencies in illegal activities, terrorist financing or the promotion of financial crimes. Since then, Nigerian financial institutions have been banned from holding or trading digital currencies to identify and authenticate customers active in digital currencies and ensure that they comply with anti-money laundering laws.
The sub-Saharan Africa or Black Africa region is currently the world’s second largest trading partner after its bitcoin counterpart after North America.