Central Bank of Nigeria Prohibits Banks to Deal with Crypto’s which Became Popular in EndSARS Protests

Binance has already disabled deposits while citizens of Africa's largest economy object to CBN’s decision.

The Central Bank of Nigeria (CBN) has ordered banks and other financial institutions to immediately close accounts interacting with cryptocurrencies.

According to the circular sent by the central bank of Africa’s largest economy, such deals are “prohibited,” and failure to comply with the directive will result in “severe regulatory sanctions.”

The bank regulator has ordered deposit money banks, non-bank financial institutions, and other financial institutions to “identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.”

In 2017, CBN said it would not license cryptocurrencies, and any crypto transactions would be outside the protection of the law.

Back in September, the country’s Securities and Exchange Commission also said it would regulate trade in digital assets to provide investor protection.

Interestingly, the anti-crypto stance from CBN comes after protests in October against SARS, excesses of the police’s Special Anti-Robbery Squad, saw the organizer accepting Bitcoin for funding following the government blocking local payments platforms from accepting donations.

“There’s a direct line that can be drawn from the EndSARS protests — which carried on partly with funding from cryptocurrency even though CBN restricted several accounts — to these latest regulations,” said Joachim MacEbong, a senior analyst at SBM Intelligence in Lagos.

“This latest instruction will end up making the case for cryptocurrency adoption better than any other argument. One promises freedom, while the status quo only reinforces restrictions,” MacEbong added.

According to Paxful, Nigeria recorded the world’s second-largest Bitcoin by peer-to-peer trading volume in 2020.

Leading spot exchange Binance has disabled deposits “to prevent more NGN coming in,” after receiving notice from their channel partners, shared exchange CEO Changpeng Zhao “CZ” on Twitter.

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