The Central Bank of Nigeria (CBN) issued an order on Friday to all banks to close accounts that were or are already transacting cryptocurrencies. CBN published the directive on its website and dubbed bitcoin trading as prohibited. The directive asked financial institutions to keep away from crypto exchanges and immediately identify and prohibit all individuals taking part in crypto trading.
In the circular, the Bank empasized failure to comply with the directive was going to result in severe regulatory sanctions. The news comes only a few months after Nigeria’s Securities and Exchanges Commission announced plans to regulate digital assets and protect investors. Additionally, the commission also set forth a strategy to ensure transparency across bitcoin transactions.
Binance Suspends Deposits in Nigeria’s Naira
Following the incident, major cryptocurrency exchange Binance went ahead and suspended deposits in Nigeria’s local fiat – the Naira. The move was in response to CBN’s Friday directive to close bank accounts linked to crypto exchanges.
Earlier on , data from Paxful indicated Nigeria was the second largest crypto currency trading hub in the world by volume. With the new policy , unfortunately Nigeria could be on its way down from a renowned crypto marketplace.
Nonetheless, the Central Bank of Nigeria’s tough position on BTC could be the result of endSARS Protests. The protests saw organizers and financiers navigate financial sansctions by accepting funding through Bitcoin. This was after the Nigerian government banned local payment platforms from collecting donations for the organizers.
Meanwhile, blockchain pundits believe Africa remains the most promising regions for cryptocurrency adoption. While regulation of the industry is good for investors and traders, it’s likely that such pushbacks as Nigeria’s ban are going to hinder innovation around the industry.
A Research study in early 2020 indicated South Africa and Nigeria had the highest crypto ownership average rates world wide. The study revealed Bitcoin will sore in Africa given the continent’s challenges with it’s local financial sector.