The Central Bank of Nigeria (CBN) has clarified its stance towards bitcoin ( ) and other cryptocurrencies, making it clear that crypto traders in the country are free to carry out their operations on a peer-to-peer basis, as its ban did not outlaw the use of cryptos, but it’s rather an effort to protect lenders under its purview, according to a report by local news publication Today Ng, on March 20, 2021.
The CBN Sheds More Light on Crypto Ban
In a somewhat positive development for Nigeria’s fledgling cryptocurrency industry, the nation’s banking regulator, the Central Bank of Nigeria (CBN), has pointed more light on its ban on bitcoin and altcoin transactions in the state.
Per sources close to the latest development, the CBN governor, Godwin Emefiele has made it clear that its directive only bars financial institutions and banks under its jurisdiction from servicing crypto-related businesses or participating in crypto-related activities, and does not try to make bitcoin trading in itself, an illegal act.
Emefiele who was not physically present during the recently held CBN 30th seminar for Finance Correspondents and Business Editors clarified the bank’s stance via his representative, Adamu Lamtek, Deputy Governor, Corporates Services.
“The CBN did not place restrictions on the use of cryptocurrencies and we are not discouraging people from trading it. What we have just done was to prohibit cryptocurrency transactions in the banking sector,” the regulator declared.
Crypto Adoption Continues to Surge in Nigeria
It will be recalled that earlier in February 2021, the CBN sent out a statement to financial institutions under its purview, reminding them that they are not allowed to service exchanges and bitcoin.
- “The CBN circular of January 12, 2017 ref FPR/DIR/GEN/CIR/06/010 which cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions, other financial institutions and members of the public on the risk associated with crypto transactions refers. Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for crypto exchanges is prohibited,” the CBN declared at the time, adding “Accordingly, all DMBs, NBFIs and OFIs are directed to identify persons and /or entities transacting in or operating crypto exchanges within their systems and ensure that such accounts are closed immediately.”
The CBN also threatened to severely punish entities who go against the above directive.
Since then, centralized exchanges in the region, including Luno, Binance, and a host of others have halted naira deposits and withdrawals. However, P2P trading venues have continued to flourish, with weekly bitcoin trading volume in the region representing over 40 percent of the total continent’s total.
With the latest development, it is expected that more exchanges in the region will start launching P2P trading venues.