Nigeria Central Bank to Restrict Banks From Servicing Cryptocurrency Exchanges

By: Dickson Arinze

February 5, 2021 3:41 PM

The Central Bank of Nigeria CBN has placed a ban on the country commercial banks from providing banking services to crypto exchanges.

In a circular issued by the Central Bank of Nigeria on Friday. The CBN notice has placed a ban on all regulated financial institutions in the country to stop cooperation with crypto exchanges.

Accordance to the central bank's notice, the ruling is an extension of the earlier warnings from the bank about the risks associated with virtual currencies.

As part of the ban, the CBN made a directory to all commercial banks to close accounts belonging to crypto exchanges as well as other businesses transacting in cryptocurrencies in the country.

The CBN also warned of stiff penalties to any bank or financial institution that fails to comply with the directive.

While cryptos have been popular in Nigeria, Digital currencies came into national consciousness amid the protests against police brutality in October 2020. At the time, the central bank ordered the suspension of bank accounts belonging to supporters of the ENDSARS movement in the country prompting a switch to (BTC) as an alternative means for donations.

As previously reported by Coinnewsafrica, Bitcoin adoption in Nigeria continues to increase. According to data from Google Trends, Nigeria is still ranked number one in the world in terms of search interest for Bitcoin.

The only other crypto-related regulatory news to come out of Nigeria as previously reported by Coinnewsafrica back in September 2020. the Nigerian Securities and Exchange Commission SEC recognized crypto as securities and at that time was working on a plan to set up a proper regulatory framework with plans to formulate a concrete legal framework.