Explainer: CBN bans cryptocurrency what Nigerians need to know about it

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Experts in the financial sector of the economy have revealed the implications of the  CBN directives on cryptocurrency.

 

 

The apex bank today directed Deposit Money Banks (DMBs), Other Financial Institutions (OFIs) and Non-Bank Financial Institutions (NBFIs) local financial institutions against having any transactions in crypto or facilitating payments for crypto exchanges.

The President Bank Customer Association of Nigeria (B AN) Dr. Uju Ogubunka, who spoke with Vanguard said that the CBN’s directive does not stop people from dealing in cryptocurrencies but they cannot make any transactions with cryptocurrency through the banking system.

He said: “Cryptocurrency is not the approved legal tender of Nigeria. The CBN approved the naira as the legal tender of the country. It is within the statutory procedure of CBN that the banks and financial institutions must operate.

“The CBN is not stopping Nigerians not to deal in cryptocurrency trading but they cannot do it through the banking system.”

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A Tier 1 banker who spoke to Vanguard on anonymity said: “The CBN has been issuing this warning on cryptocurrency exchanges for a long time.

“With the recent circular, the CBN is saying that any person or entity who is receiving cryptocurrency as payment in his bank account and withdraws it as cash cannot do that again.

“Such a person is being called to come and close that account because it will not be functional. The bank is not saying it wants crypto dealers money. It is saying that as a crypto dealer, come and take your money and close your account.

“The implications of this policy on dealers of cryptocurrency is that they can no longer make withdrawals of cash in banks when a payment is made using cryptocurrency in Nigeria.

“Also, the Cryptocurrency exchanges like Luno and the rest will need to source other alternative means to make transactions and payments using cryptocurrencies.

 

 

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