Central Bank of Nigeria bans banks from servicing crypto exchanges

The Central Bank of Nigeria has banned all regulated financial institutions from providing services to crypto exchanges in the country.

The ban was contained in a circular issued by the CBN on Friday. According to the central bank, the ruling is an extension of previous warnings by the bank about the risks associated with virtual currencies.

Source: Twitter

As part of the ban, the CBN has ordered all commercial banks to close accounts from crypto exchanges as well as other deals that do business in cryptocurrencies in the country.

The CBN also warned of harsh penalties for banks or financial institutions who violate the policy.

The Central Bank of Nigeria did not immediately respond to Cointelegraph’s request for comments on the matter. In a previous correspondence, Osita Nwanisobi, acting director of the CBN’s communications division, told Cointelegraph that commercial banks had been warned beforehand not to participate in the crypto market.

While cryptos were popular in Nigeria, the protests against police brutality in October 2020 brought virtual currencies to national awareness. At that time, the central bank ordered the bank accounts of supporters of the ENDSARS movement to be blocked and initiated the switch to Bitcoin (BTC) and crypto donations.

As previously reported by Cointelegraph, the acceptance of Bitcoin in Nigeria continues to increase. According to data from Google Trends, Nigeria remains number one in the world in terms of search interest in Bitcoin.

The ban on the CBN also recalls the actions taken by its Indian counterpart, the Reserve Bank of India, in 2018. Two years later, the Indian Supreme Court overturned the order.

Aside from the CBN ban, the only other crypto-related regulatory news from Nigeria was in September 2020. At that time, the Nigerian Securities and Exchange Commission recognized crypto as securities and planned to formulate a specific legal framework for digital assets.