The Central Bank of Nigeria has ordered its national banks and all other financial institutions to close customer accounts linked to cryptocurrency use.
Crypto Is Prohibited in Nigeria
For the first time, a central bank of a large country has publicly ordered the closing of citizens’ bank accounts for using cryptocurrencies. The ruling comes into effect immediately.
In a letter mandate, The Central Bank of Nigeria (CBI) addressed all banking and other financial institutions and reminded them that it was completely “prohibited” to help facilitate crypto transactions.
Under the mandate, banking institutions have been instructed to identify citizens and other companies within the country who are active users of cryptocurrency and close their bank accounts.
The letter was signed by Bello Hassan, Director of Banking Supervision, and instructed all Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFs), and Other Financial Institutions (OFIs) in Nigeria to follow the mandate strictly.
“Accordingly, all DMBs, NBFIs, and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure such accounts are close immediately.’
The Central Bank also made it clear that if banks do not enforce the rule, they will be given harsh regulatory sanctions.
Nigeria’s Central Bank (CBI) has opposed using Bitcoin and other cryptocurrencies for many years, despite their large demand.
The central bank first issued a circular in January 2017 where it cautioned banks and all other financial institutions about the “risk” associated with cryptocurrency transactions.
Per estimates by the International Monetary Fund (IMF), Nigeria is the world’s 27th largest economy. The latest ruling on cryptocurrencies may completely shun the nascent technology in the fast-developing African country.
The Nigerian ruling is a sharp contrast with banking regulation in the U.S., for example, where banks themselves are allowed to run cryptocurrency nodes.
Disclosure: The author did not hold crypto mentioned in this article at the time of press.