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Dogecoin was trending on Twitter Nigeria a few days before the CBN put some restrictions on cryptocurrency. Bitcoin, Ethereum are also among the biggest cryptocurrencies in Nigeria.
The Central Bank of Nigeria, CBN sent out a circular on February 5, 2021, to warn Nigerians of the risks associated with trading cryptocurrency.
According to the CBN, all banks in Nigeria should avert from the use of or possession of cryptocurrencies, stop the facilitation of cryptocurrency payment and exchange.
It further said that this was simply a reminder and that the rule is no different from the previous orders issued earlier to forbid cryptocurrency – first on January 12, 2017, and once more on February 27, 2018.
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“It is important to clarify that the CBN circular of February 5, 2021 did not place any new restrictions on cryptocurrencies”.
The CBN explains its new rule on cryptocurrency
The CBN is simply restricting all banks from carrying out any cryptocurrency transaction, not banning the use of cryptocurrency.
The former Deputy Governor of the Central Bank of Nigeria, Kingsley Moghalu, further explains that CBN ruling does not make the use f cryptocurrency a criminal offence in Nigeria.
This means that an individual who still wants to deal with cryptocurrency in the country can do so without fear of penalty. An account to manage cryptocurrency trade and exchange will be the only challenge for such persons though. Like Moghalu noted “it is sort of a grey area” and translating this might be a bit tricky.
The CBN circular did say that all accounts dealing on cryptocurrency exchange should be identified and closed down immediately and “breaches of this directive will attract severe regulatory sanctions”.
The CBN will sanction financial institutions for failing to follow the directives, not individuals. The sec has a regulatory framework for cryptocurrency in Nigeria for people who want to understand what breaches the law.
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Cryptocurrency in Nigeria
Nigeria is a top cryptocurrency shopper and second-biggest Bitcoin user. Moghalu said that within the last five years, $500 million worth of Bitcoin has been traded within Nigeria.
