The Central Bank of Nigeria (CBN) has clarified its recent reminder that asked Deposit Money Banks (DMBs) to refrain from transacting in/ or with entities dealing in cryptocurrencies. The CBN has disallowed banks in Nigeria to use, hold, trade and/or transact in cryptocurrencies, like the central banks in many other countries. The reason is the significant risks associated with cryptocurrency transactions. These include the risk of loss of investments, money laundering, terrorism financing, proliferation of arms, tax evasion, drug trafficking, etc.
The CBN has reassured that its actions are not against the development of FinTech or a technology-driven payment system. Rather, the CBN has pointed out its role in enabling the innovations in Nigeria’s payment system. The CBN has further highlighted its robust regulatory framework which has invited several new players in various licensing categories and generated employment for Nigeria’s youth.
The CBN has reiterated that its recent regulatory directive was necessary to protect the financial system and Nigerians in general from the risks associated with cryptocurrency transactions. Thus, the Bank will continue to advise Nigerians against using cryptocurrencies to protect the Nigerian financial system from financial criminals.
Source: Central Bank of Nigeria