The Central Bank of Nigeria (CBN) has fined 3 of the country’s commercial banks for flouting a cryptocurrency trading restriction levied a year ago, TechCabal reports.
The 3 banks, Stanbic IBTC, Access Bank, and United Bank for Africa (UBA) were fined a total of ₦800 million (~$1.9 million) for operating accounts used for crypto trading.
Standard Bank Group Ltd was fined ₦200 million (~$481,000) for 2 accounts alleged to have been used for crypto transactions. Access Bank was fined ₦500 million (~$1.2 million) for failure to close customers’ crypto accounts, according to a filing with the Nigerian Exchange Ltd; and United Bank for Africa (UBA) was fined ₦100 million (~$240,000) for digital currency transactions by a customer.
What’s going on?
In February 2021, the Central Bank of Nigeria ordered all commercial banks and financial institutions to close all customer accounts that operate in or trade cryptocurrency. The apex bank referred to a 2017 circular that ordered commercial banks “not to use, hold, trade and/or transact in cryptocurrencies “.
Like most countries like China that have restricted crypto trading, CBN cited financial safety as the reason for the ban. In its circular clarifying its position, Osita Nwanisobi AG Director, Corporate Communications of CBN stated that most crypto users value anonymity, obscurement and concealment. “It is on the basis of this opacity that cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion,” he said.
Is crypto banned in Nigeria?
It’s important to note that the CBN didn’t ban cryptocurrencies in Nigeria as it’d have to outlaw crypto exchanges and shut down the internet to achieve that. It did, however, cut the link between crypto exchanges and their users. So Nigerians can still buy and trade crypto, just not through any Nigerian bank or fintech.
In response to the restriction Nigerian crypto exchange platforms have responded with new ways to circumvent the restriction including introducing peer-to-peer (P2P) exchanges for their cryptocurrency transactions, as well as trading stable coins.
Cryptocurrency is not yet legal in Ghana. The central bank recently repeated its caution to all financial institutions and the public against transacting cryptocurrency. Byt a number of cryptocurrency platforms and exchanges continue to advertise and do business in Ghana, and the central bank is fully aware of it.
Meanwhile, Chairman of Ghana Dot Com and a well known champion of blockchain technology in Ghana, Prof. Nii Narku Quaynor has urged the central bank to lead the way for the quick adoption of cryptocurrencies through innovation regulation.
He indeed warned that while central banks in Africa are keeping financial institutions restricted from crypto, financial institutions elsewhere are building wallets and taking over the space. This he said, could lead to a situation where Africa plays catch again due to the lateness of regulators in legalising crypto.