The Central Bank of Nigeria (CBN) has directed all Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs) and Other Financial Institutions (OFls) to close the accounts used for crypto currency operations.
The CBN in a circular BSD/DIR/GEN/LAB/14/001 issued on Friday, ordered all financial institutions “to identify persons and/or entities transacting in or operating crypto currency exchanges within their systems and ensure that such accounts are closed immediately”.
Any financial institution that breaches this directive the CBN warned “will attract severe regulatory sanctions”.
According to the CBN, “dealing in crypto currencies or facilitating payments for cryptocurrency exchanges is prohibited”.
The circular signed by Bello Hassan, Director of Banking Supervision and Musa I Jimoh Director, Payments System Management Department said the order is to take immediate effect.
They also said the apex bank had in the past “cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFls) and members of the pubic on the risk associated with transactions in crypto currency refers”.
However, reactions have trailed the apex bank’s decision with social media influencers like Japheth Omojuwa stating that “this letter, if it stands, will literally kill Nigerian companies and also harm foreign investment”.
Omojuwa argued that “investors from mostly the United States have, in spite of the risks involved in investing in our country, invested in Nigerian fintech companies that this letter clearly targets”.
“This is not going to be a case of losing some money, this is a case of companies closing shop. Companies operating on investment from abroad. That’s before you address the effect on everyday Nigerians trading legitimately and looking to make ends meet in the midst of an excruciating environment and economy”.
With this decision by the CBN, Omojuwa lamented that “the CBN wants to kill businesses”.
Also reacting to the CBN directive, Professor Uche Uwaleke of Nasarawa state University said the decision may not be unconnected with the fact that “the CBN and the Securities and Exchange Commission (SEC) are not yet ready with regulations guiding crypto asset trading platforms operations in Nigeria.”
He urged the public to see this directive by the CBN to banks “in the light of the risk that unregulated crypto currency trading could pose to the financial system.”