The Central Bank of Nigeria Warns Financial Institutions Against Facilitating Crypto Payments with Crypto Exchanges

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The Central Bank of Nigeria (CBN) has put out a circular notifying financial institutions and other deposit-taking entities against facilitating crypto and digital assets transactions.

The circular mentions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges in the country is prohibited among regulated institutions and a breach of this directive will attract severe regulatory sanctions.

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SEE ALSO: Nigeria Becomes the First African Country to Officially Recognize Cryptocurrencies as Securities

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The circular, which has reportedly been distributed to regulated financial institutions in the country and made available on the CBN website, explicitly warns deposit money banks, non-bank financial institutions, and other financial institutions that ‘dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.’

Some popular services like FlutterWave, that facilitate transactions for the largest exchanges in Nigeria, have already informed their clients on service suspension following the directive.

The letter however is not a huge shock to many considering the previous position of CBN when it comes to crypto products in Nigeria.

CBN has previously warned that virtual currencies are not legal tender in Nigeria and any bank or institution transacting in such does so at its own risk.

Nigeria is the largest economy in Africa and one of the leading countries globally in crypto adoption.

Nigeria is also the leading country globally in youth crypto adoption according to a recent report.

A ban on crypto exchanges running bank accounts is expected to have a negative effect on the growth of the market, especially for large crypto brands operating in the country.

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Read / download the circular here

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