Following the latest directive by the Central Bank of Nigeria banning cryptocurrency trading, the country risks losing N5bn traded daily on the crypto exchange.
The CBN had on Friday in a circular directed all Deposit Money Banks and other financial institutions to immediately close all accounts associated with cryptocurrency trading.
In the circular entitled ‘Letter to all Deposit Money Banks, Non-bank Financial Institutions and other Financial Institutions,’ the apex bank said the new order followed its earlier declaration of cryptocurrency as illegal.
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“Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchange is prohibited,” it stated.
Also, in the circular signed by the Director of Banking Supervision, Bello Hassan, and Director of Payments System Management Department, Musa Jimoh, the apex bank warned that any financial institution that breached its directive would face severe sanction.
“Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.
“Please note that breach of this directive will attract severe regulatory sanctions,” it added.
Reacting to the CBN’s directive, the Chief Executive Officer of Swift eCurrency, Adelola Sokoya, said Nigerians, as the second highest users of Bitcoin after the United States, would be losing over N5bn traded daily on the exchange.
The crypto merchant stated, “Instead of creating a framework of taking a chunk of the profit made by all the bitcoin exchanges that have opened shop for our backyard, you decide to ban it. Who has bewitched CBN?”
Corroborating Sokoya, a business analyst, who chose to be anonymous, said the government could decide on policies to protect the interest of the citizens, adding, however, that it must properly be guided on the latest business trends.
“This will inform their decision-making going forward.
“The agencies in charge of policy-making should learn more to act prudently. No financial institution would ignore such trading volumes of N5bn daily on cryptocurrency,” the analyst added.
Despite the ban, Luno, an African cryptocurrency platform, stated that the company would continue to operate as normal while seeking further clarification from the authorities.
However, it revealed that some naira deposit methods were already affected, but that withdrawals were unaffected and would continue to be processed, though longer than usual.
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