CBN Governor Godwin Emefiele arrived at the National Assembly to comply with a request from the Senate Joint Committee on Banking Insurance and other financial institutions (including ICT and cybercrime) to report on the opportunities and threats of cryptocurrencies to the national economy.
The Senate decision to invite the governor of CBN is a continuation of the proposal of the federal legislature, Senator Istifanus Gyang during the February 11 plenary session, on the CBN directive to stop financial institutions in cryptocurrency transactions and the issues arising from them.
Federal lawmakers have called for caution, noting that although cryptocurrency has its downsides, it has become the fastest-growing form of transaction worldwide.
They argued that technology has changed the way we do business in Nigeria and that the country cannot escape cryptocurrencies.
On February 5, CBN ordered all banks to close the accounts of everyone who trades in cryptocurrency.
The order is contained in a circular to banks and other financial institutions, signed on Friday by banking supervision director Bello Hassan, and is expected to take effect immediately.
According to CBN, trading in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.
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“Circular of the Central Bank of Nigeria of 12 January 2017, ref. “FPR / DIR / GEN / CIR / 06/010, which warned banks to deposit (DMB), non-banking financial institutions (NBFI), other financial institutions and members, refers to the risk associated with transactions in cryptocurrencies,” the statement said.
“Furthermore, in accordance with the previous regulatory guidelines on this topic, the bank hereby wishes to remind regulated institutions that deal with cryptocurrencies or enable payment for the exchange of cryptocurrencies is prohibited.
“Accordingly, all DMB NBFIs or OFIs are directed to identify persons and / or entities that trade or exchange cryptocurrencies within their systems and ensure that such accounts are closed immediately.
“Keep in mind that violating this directive will attract serious regulatory sanctions.” This letter shall take effect immediately. “
CBN further noted that the use of cryptocurrencies in Nigeria is contrary to existing laws.
Apex Bank has warned deposit money banks (DMBs) to abandon cryptocurrency transactions and do business with entities that do so.
According to CBN, cryptocurrencies are “issued by unknown and unregulated entities” and are increasingly used to carry out “many illegal activities, including money laundering, terrorist financing, the purchase of small arms and light weapons and tax evasion.”