The Central Bank of Nigeria (CBN) issued a five-page observation Sunday clarifying its place on cryptocurrencies after a regulatory caution to native banking establishments on Friday despatched shockwaves via social media.
In Sunday’s observation, the CBN mentioned Friday’s letter was once just a reminder that cryptocurrencies weren’t criminal gentle in Nigeria, and was once reiterating a place the financial institution has held since 2017, no longer implementing new restrictions on the trade.
“It is important to clarify that the CBN circular of February 5, 2021 did not place any new restrictions on cryptocurrencies, given that all banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, not to use, hold, trade and/or transact in cryptocurrencies,” the observation mentioned.
The CBN despatched a letter to native monetary establishments on Friday, ordering them to close down all financial institution accounts related to cryptocurrency buying and selling platforms. In reaction to the letter, crypto buying and selling platform Binance and native digital fee apps like Bundle halted deposits. Angered Nigerian crypto customers took to Twitter and different social media platforms to specific their displeasure.
The press observation, signed by way of Osita Nwanisobi, Ag. director of Corporate Communications, is going on to listing different international locations that experience banned its banks from dealing in cryptocurrencies and makes the declare that during China, “cryptocurrencies are completely banned and all exchanges closed as well.”
It additionally states that cryptocurrencies are issued by way of “unregulated and unlicensed” entities, and that crypto belongings are risky speculative belongings that may be a risk to Nigerian customers.
“The very name and nature of ‘cryptocurrencies’ suggests that its patrons and users value anonymity, obscurity, and concealment,” the observation mentioned.
In the letter, the CBN confident that this stance won’t inhibit the growth of the fintech sector within the nation, or its bills ecosystems. The directive turned into essential, it mentioned, to give protection to Nigerians, together with its youths from the dangers inherent in crypto belongings transactions.
“Due to the fact that cryptocurrencies are largely speculative, anonymous and untraceable they are increasingly being used for money laundering, terrorism financing and other criminal activities,” the observation mentioned.
The letter additionally said that the prime volatility inherent in crypto belongings posed a perfect danger to “small retail and unsophisticated investors” who stand to lose so much.
“In light of these realities and analyses, the CBN has no comfort in cryptocurrencies at this time. It will continue to do all within its regulatory powers to educate Nigerians to desist from its use and protect our financial system from activities of fraudsters and speculators,” the observation mentioned.
Read CBN’s complete observation underneath: