The Central Bank of Nigeria says its ban on crypto accounts is nothing new

A five-page statement was issued by the Central Bank of Nigeria (CBN) on Sunday clarifying its position on cryptocurrencies after a regulatory warning to local banking institutions sent shockwaves via social media on Friday.

In Sunday's statement, the CBN said Friday's letter was only a reminder that Nigeria's cryptocurrencies were not a legal tender, and reiterated the bank's position since 2017, not imposing new industry restrictions.

"It is important to clarify that there were no new restrictions on cryptocurrencies in the CBN circular of February 5, 2021, given that all banks in the country had previously been prohibited from using, holding, trading and/or transacting cryptocurrencies through the CBN circular of January 12, 2017," the statement said.

On Friday, the CBN sent a letter to local financial institutions ordering them to shut down all bank accounts associated with trading platforms for cryptocurrencies. Crypto trading platform Binance and local electronic payment apps such as Bundle halted deposits in response to the letter. To express their displeasure, angered Nigerian crypto users took to Twitter and other social media platforms.

A statement from the press, signed by Osita Nwanisobi, Ag. Corporate Communications Manager continues to list other countries that have banned their banks from dealing in cryptocurrencies and claims that "cryptocurrencies are completely banned and all exchanges are also closed" in China.

While China has imposed a number of crypto exchange and user restrictions, it has not completely banned cryptocurrencies.

It also states that "unregulated and unlicensed" entities are issuing cryptocurrencies, and that crypto assets are volatile speculative assets that can be a danger to Nigerian users.

The very name and character of 'cryptocurrencies' suggests that anonymity, obscurity, and concealment are valued by its patrons and users," the statement said."

The CBN assured in the letter that this position will not inhibit the progress of the country's fintech sector or its payment ecosystems. It stated that the Directive was necessary to protect Nigerians, including their young people, from the risks inherent in transactions involving crypto-assets.

"The statement said, "Due to the fact that cryptocurrencies are largely speculative, anonymous and untraceable, they are increasingly used for money laundering, financing terrorism and other criminal activities.