CBN warns banks against dealing in Cryptocurrencies

Elizabeth Christopher

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The Central Bank of Nigeria (CBN) has warned banks against dealing in crypto-currencies or facilitating payments for cryptocurrency exchanges.

The apex bank said this in a circular obtained by Voice of Nigeria and addressed to all Deposit Money Banks Non-Bank Financial Institutions and other financial institutions.

 

The CBN circular was jointly signed by the Director, Banking Supervision, Bello Hassan and the Director, Payments System Department, Musa Jimoh.

 

A cryptocurrency is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions.

Much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices in an upward manner.

 

The apex bank in the circular cautioned the banks and other financial institutions on the risks associated with transactions in crypto currency.

 

It said further to its regulatory directive on January 12, 2017, banks should desist from facilitating payments for cryptocurrency transactions.

 

The CBN in the circular directed all Deposit Money Banks, Non-Bank Financial Institutions and Other Financial Institutions to also identify persons and entities transacting crypto-currencies.

 

It also directed them to identify entries transacting and operating crypto-currency exchanges within their systems and ensure that such accounts are closed immediately.

 

The apex bank warned that any Deposit Money Banks, Non-Bank Financial Institutions and Other Financial Institutions that failed to comply with the directive would attract severe regulatory sanctions.

 

The circular reads in part, “Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in crypto-currencies or facilitating payments for crypto-currency exchanges is prohibited.

Accordingly, all DMBs, NDFIs and OFIs are directed to identify persons and entities transacting in or operating crypto-currency exchanges within their systems and ensure that such accounts are closed immediately.”

 

 

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