Nigeria’s Central Bank Bars Banks From Bitcoin, Virtual Currencies

Africa Business News

The Central Bank of Nigeria (CBN) has barred deposit money banks and all other financial institutions from the operation of any form of virtual currency including Bitcoin. According Mr Kelvin Amugo, Director, Financial Policy and Regulation department, CBN, the ban was necessitated by money laundering and terrorism financing risks inherent in operations of virtual currencies.

According to Amugo who presented circulars to banks and other financial institutions on virtual currency operations in Nigeria, “The emergence of Virtual Currencies (VCs) has attracted investments in payments infrastructure that provides new methods of transmitting value over the internet.

“Transactions in VCs are largely untraceable and anonymous making them susceptible to abuse by criminals, especially in money laundering and financing of terrorism. VCs are traded in exchange platforms that are unregulated, all over the world. Consumers may, therefore, lose their money without any legal redress in the event these exchanges collapse or close business.”

“The attention of banks and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation decision by the CBN….Ensure that you do not use, hold, trade, and/ or transact in anyway in virtual currencies; Ensure that existing customers, that are virtual customers exchangers, have effective AML/CFT controls that enables them to comply with customers’ identification, verification and transaction monitoring requirements.” read the circular.

The CBN ban came up shortly after the Securities and Exchange Commission (SEC) issued a warning against virtual currencies last week.

Sources; Vanguard Nigeria The Guardian Nigeria