Reports reaching Nairametrics indicate banks are still sending warnings to their customers to avoid using their accounts for cryptocurrency transactions.

This comes on the heel of the recently released SEC regulation on cryptocurrency, which essentially formalized cryptocurrency as an asset class in Nigeria.

In an email seen by Nairametrics shared with the bank’s customers, it warned against using their bank accounts for cryptocurrency transactions as the accounts will be closed if they are caught.

What the email stated

The email stated, “Further to its earlier communication that dealing in Cryptocurrencies or facilitating payments for Cryptocurrency exchanges is prohibited, the Central Bank of Nigeria (CBN) has in its letter with reference number BSD/DIR/GEN/LAB/14/001, dated February 5, 2021, directed that all banks, non-bank financial institutions and other financial institutions should identify persons and/or entities transacting in or operating Cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.

“In line with the CBN directive, kindly note that any account identified as transacting in or operating Cryptocurrency exchanges within our system will be closed immediately.”

That the circular was sent out this month suggests the CBN is still wary of cryptocurrencies despite the action of the Security and Exchange Commission. Nairametrics had earlier reported that commercial banks typically PND (post no debit) of customers when they see transactions akin to cryptocurrency especially if the description suggest anything in that direction.

What you should know

  • The CBN instructed financial institutions to stop honoring crypto-related transactions last year, on the 5th of February 2021, with many crypto exchanges and market participants having to switch to the P2P market in other to participate in the market.
  • There was also an account closing spree by banks towards the end of the year, especially with Kuda Bank, where P2P players’ accounts were closed down as the clamp down on participation in the industry intensified.
  • Earlier this year, the CBN fined 6 banks, a total of N1.315 billion for failing to comply with regulations prohibiting customers from transacting in cryptocurrencies.
  • The SEC recently released a regulatory framework around the crypto industry, spelling out the requirements and rules for governing and participating in the space.
  • With this new circular, it looks like there is a significant disconnect between the CBN and SEC as they appear to not be on the same page regarding the crypto space.
  • Despite the ban, data suggest that Nigeria is still one of the top countries in terms of crypto adoption in the world. Asides from this, the country leads African nations in terms of P2P transactions.

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