The Central Bank of Nigeria has placed a ban on all regulated financial institutions from providing services to crypto exchanges in the country, as the prohibition was contained in a circular issued by the CBN on February 5 (Friday).
It has been reported according to the central bank’s notice that the ruling is an extension of earlier warnings from the bank about the risks associated with digital currencies.
However, the CBN, as part of the ban, has directed all commercial banks to close accounts belonging to crypto exchanges and 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.
Osita Nwanisobi, the Acting Director of the CBN’s Communications Department, said that commercial banks had previously been warned not to participate in the crypto market. While cryptocurrencies have been popular in Nigeria, digital currencies came into national consciousness amid protests against police brutality in October 2020.
Big news coming out of Nigeria: The Central Bank of Nigeria bans banks from servicing crypto exchanges. What will this mean for one of the biggest crypto hubs in Africa? https://t.co/UuDsVBgSHw — Cointelegraph (@Cointelegraph) February 5, 2021
The report said that the central bank ordered the suspension of bank accounts belonging to supporters of the EndSARS movement by prompting a switch to Bitcoin (BTC) and crypto donations.
As it has been reported earlier, Bitcoin adoption in Nigeria continues to increase.
According to data from Google Trends, Nigeria is still number one in the world in terms of search interest for Bitcoin. The CBN’s ban is also reminiscent of the actions taken by its Indian counterpart, the Reserve Bank of India, back in 2018. Two years later, India’s Supreme Court reversed the order.
Thus, apart from the CBN ban, the only other crypto-related regulatory news to come out of Nigeria was back in September 2020.