Nigerian central bank bans banks from serving crypto exchanges

The Central Bank of Nigeria (CBN) has prohibited commercial banks from maintaining accounts for crypto exchanges, effectively banning cryptocurrencies from regulated financial institutions. The CBN in a letter to banks stated that the ban was a follow up to earlier warnings and therefore all banks and other financial institutions were expected to immediately close any crypto accounts and report crypto traders to the regulator. This resulted in angry reactions from cryptocurrency users, some of whom predict that the directive would not reduce cryptocurrency use, but rather encourage peer to peer exchanges. In 2020, Quartz Africa ranked Nigeria as the second largest bitcoin market by volume behind the USA.

 In a second press release, the CBN reiterated the ban on cryptocurrency, explaining the risks involved. In related news, Nigeria’s Securities and Exchange Commission (SEC) put on hold plans to regulate cryptocurrencies until crypto networks are allowed to operate bank accounts in the country.