The Central Bank of Nigeria (CBN) has directed all Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs) and Other Financial Institutions (OFls) to close the accounts used for crypto currency operations.
The apex bank, in a circular BSD/DIR/GEN/LAB/14/001 issued on Friday, ordered all financial institutions “to identify persons and/or entities transacting in or operating crypto currency exchanges within their systems and ensure that such accounts are closed immediately.”
It warned that, “Any financial institution that breaches this directive the CBN warned “will attract severe regulatory sanctions. Dealing in crypto currencies or facilitating payments for crypto-currency exchanges is prohibited.”
The circular signed by the director of banking supervision, Bello Hassan, and the director, payments system management department, Musa I. Jimoh, stated that the order “is to take immediate effect.”
According to the circular, the apex bank had in the past “cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFls) and members of the public on the risk associated with transactions in crypto currency refers.”
However, reactions have trailed the apex bank’s decision with social media influencers like Japheth Omojuwa stating that “this letter, if it stands, will literally kill Nigerian companies and also harm foreign investment.”
Omojuwa argued that, “Investors from mostly the United States have, in spite of the risks involved in investing in our country, invested in Nigerian fintech companies that this letter clearly targets.
“This is not going to be a case of losing some money; this is a case of companies closing shop; companies operating on investment from abroad. That’s before you address the effect on everyday Nigerians trading legitimately and looking to make ends meet in the midst of an excruciating environment and economy.”
With the apex bank’s decision, Omojuwa said, “the CBN wants to kill businesses.”
Also, reacting to the CBN directive, Professor Uche Uwaleke of Nasarawa state University said the decision might not be unconnected with the fact that “the CBN and the Securities and Exchange Commission (SEC) are not yet ready with regulations guiding crypto asset trading platforms operations in Nigeria.”
He urged the public to see this directive by the CBN to banks “in the light of the risk that unregulated crypto currency trading could pose to the financial system.”
