By Oyindamola Ruth
The Central Bank of Nigeria (CBN) has on Friday February 5 directed banks to close accounts of persons or entities involved in cryptocurrency transactions within their systems.
This directive was contained in a statement signed by Musa Jimoh, director of the payment system management department and Bello Hassan, the director for banking supervision.
And the circular was addressed to all deposit money banks (DMBs), non-bank financial institutions (NBFIs), and other financial institutions (OFIs).
The statement reads in parts below…
“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 exchanges is prohibited.
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.”
In January 2017, the Central Bank of Nigeria described bitcoin, litecoin, and other crypto currency as digital currencies used largely used in terrorism financing and money laundering.
For this reason, the CBN noted that Bitcoin, and other crypto currency are not accepted as legal tender in Nigeria.
Also in February 2018, the apex bank warned Nigerians who are involving themselves in crypto currency investment, adding that should any transactions with such currencies collapse, they wouldn’t be able to seek any redress.
Meanwhile, Nigerian singer Davido expressed his interest of starting Bitcoin company.
See his tweet below…
What is Bitcoin?
Bitcoin is a crypto currency that was founded in 2009 by an unknown person using the alias Satoshi Nakamoto.
It is fondly called a transaction made with no middle man that is no Bank.
People often send Bitcoin to each other using mobile apps or their computers via their digital wallet in which the crypto currency is stored.
The digital wallet is a virtual bank account that allow users to receive or send Bitcoin.
Due to the anonymity of Bitcoin transaction (transactions only recorded in wallet ID), Bitcoin became the currency of choice for people doing illicit activities.