Central Bank of Nigeria Orders Banks to Discontinue Servicing Bitcoin Clients

News emanating from Nigeria reveals that the country’s central bank has allegedly placed a ban on buying and selling cryptocurrencies.

A circular disseminated by the Nigerian Central Bank has revealed the apex bank’s intention to clamp down on bitcoin buying and selling. The Central Bank issued a memo signed by its Director of Finance and Policy Regulation, Kevin Amugo, in 2017, warning against the use of unregulated virtual currencies and highlighted the place of virtual currencies in facilitating money laundering and financing terrorism.

The new circular issued by its Banking Supervision Department appears to be a strict follow-up to earlier warnings. The Central Bank is now reportedly ordering all Deposit Money Banks (DMB), Non-Bank Financial Institutions (NBFI), and Other Financial Institutions (OFI) to immediately close the accounts of persons engaging in cryptocurrency trading to avoid facing sanctions.

“Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.” Reads the memo.

The news comes right off the back of a proposed bill to ban private cryptocurrencies in India.

Imposed Ban Will Impede the Fast Thriving Nigerian Cryptocurrency Industry

This development, which has pulled the plug on a fast-growing fintech society, comes as a rude shock to the Nigerian crypto community, especially as it is in stark contrast with the Securities and Exchange Commission’s (SEC) promise to regulate cryptocurrencies in a way that would “not hinder technology or stifle innovation, but create standards that encourage ethical practices that ultimately make for a fair and efficient market.”

Just last December, CryptoPotato reported Nigeria to be the second-largest Bitcoin P2P market in the world, behind the United States. Bitcoin search results from the country further affirmed strong interest in digital currencies and indicate the presence of a flourishing market.

The booming Nigerian crypto scene has not gone unnoticed by global industry giants. Around August last year, BlockchainCom reported a 60% increase in the usage of their web wallet by Nigerians since April 2020. Paxful also recorded a 137% increase in new registrations from Nigeria between January and September 2020.

As one of the leading nations in the quest for mass cryptocurrency adoption, the impact of a bitcoin ban will definitely transcend beyond the shores of Nigeria and may amplify the need to seek new solutions that will eventually land Bitcoin in the government’s good books.