On 5th February, 2021, the Central Bank of Nigeria (CBN) through a circular to all banks and Non bank financial institutions prohibited the institutions from facilitating payments for cryptocurrency exchanges. The circular which was signed by the apex bank’s Director of Banking Supervision, Bello Hassan, and Director, Payment System Management Department, Musa Jimoh, reminded the financial institutions that its stand on cryptocurrency in 2017 still stands.
In response to the circular, crypto trading platform; Binance and local electronic payment apps like Bundle halted deposits. This got many Nigerians reacting, especially on social media.
The CBN in a statement signed by its acting Director of Corporate Communications, Osita Nwanisobi, said the latter circular to banks and other financial institutions was a reminder that cryptocurrencies were not legal tender in Nigeria and was reiterating a position the bank has held since 2017, not imposing new restrictions on the industry.
“It is important to clarify that the CBN circular of Feb. 5, 2021, did not place any new restrictions on cryptocurrencies, given that all banks in the country had earlier been forbidden, through CBN’s circular dated Jan. 12, 2017, not to use, hold, trade and/or transact in cryptocurrencies,” the statement said.
The bank claimed that countries like China completely banned cryptocurrency and all exchanges but IMPACT NEWS finds that inaccurate. Although the communist country imposed series of restrictions on crypto exchanges and users, it has not outrightly banned cryptocurrencies entirely.
We wondered why the CBN would rather wait for other countries to innovate before taking steps towards innovation. There is no doubt that cryptocurrencies trading comes with risks and grey areas that need careful tread, yet this does not warrant outright ban.
We appreciate the proactive intervention of the Senate and its decision to invite the governor of the central bank (CBN), Godwin Emefiele, and the director general of the Nigerian Securities and Exchange Commission, Lamido Yuguda, to appear at a time to be determined and explain the opportunities and threats of cryptocurrency.
It is important that the CBN provides regulation for cryptocurrency operations in the country in order to tap into yet-to-be discovered benefits in the trade and operations.
