Today, the Central Bank of Nigeria (CBN) issued a circular that bans crypto payments through financial institutions. Thus, banks and other financial agencies cannot facilitate crypto payments with crypto exchanges.
The circular warns regulated institutions against facilitating payments for crypto exchanges. It mentions that going against the new directive will attract regulatory sanctions. This circular has been widely distributed to Nigeria’s financial institutions, and it is available on the CBN website. Deposit money banks, non-bank financial agencies, and other agencies must adhere strictly to this instruction.
In adherence to the circular, Flutterwave is currently disabling support for crypto use cases in Nigeria. Flutterwave is one of the most popular payment service providers in the country.
However, this letter is not a great shock to Nigerians because CBN has always been against digital currencies. CBN has previously given a warning stating that cryptocurrencies are not legal tender.
Nigeria is the largest African economy and a leading country in crypto and blockchain adoption. According to recent reports, Nigeria is the second-largest Bitcoin market after the US. So, how will this new directive affect crypto products in Nigeria?
While CBN bans financial institutions against crypto payments, Nigerians will have to make full use of P2P payments. Thus, Central Bank’s circular might have little or no effect on crypto adoption in Nigeria.