The Central Bank of Nigeria (CBN) issued a Directive on Friday reminding banks and all financial institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges are prohibited.
By this Directive, the CBN orders financial institutions to immediately close accounts that purchase or hold virtual currencies.
Meaning that this Directive prohibits Nigeria’s residents from buying, selling, or maintaining these virtual currencies in their accounts domiciled in the country.
The CBN warns that any violation of the Directive will result in severe penalties; the central bank said its decision was motivated by "the risk associated with transactions in cryptocurrency".
Under the Directive, CBN refers to an earlier Circular issued in 2017 , which warned financial institutions against virtual currencies, as well as consumers who may lose their money without legal redress in the event these exchanges collapse or lose business given that virtual currencies are traded in exchange platforms that are unregulated.
Under Circular of 2017, CBN reiterates that virtual currencies such as Bitcoin, Ripples, Monero, Litcoin, DogeCoin, Onecoin, and similar products are not legal tenders in Nigeria, meaning that they are not considered as a form of money recognized by Nigeria.
It is worth noting that the above-mentioned Directive comes at a time when Bitcoin and DogeCoin cryptocurrency transactions have skyrocketed, and when a recent report showed that Nigeria emerged as one of the fastest-growing crypto markets globally.