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Central Bank of Nigeria bans Commercial banks from servicing crypto exchanges

Nigeria’s central bank has prohibited commercial banks from providing account services to crypto exchanges.

The Central Bank of Nigeria has placed a ban on all regulated financial institutions from providing services to crypto exchanges in the country.

The prohibition was found in a round issued by the CBN on Friday. Based on the central bank’s notice, the ruling is an expansion of earlier warnings from the lender in regards to the risks connected with virtual currencies.

Included in the ban, the CBN has directed all commercial banks to close accounts owned by crypto exchanges in addition to other businesses transacting in cryptocurrencies in the country.

The CBN also warned of stiff penalties to any bank or financial institution that doesn’t adhere to the directive.

Nigeria’s central bank didn’t respond immediately to Cointelegraph’s request for comments on the issue. However, in a prior bit of correspondence, Osita Nwanisobi, acting director of the CBN’s communications department told Cointelegraph that commercial banks had previously been warned to not be involved in the crypto market.

While cryptos have already been popular in Nigeria, virtual currencies arrived to national consciousness amid the protests against police brutality in October 2020. 

During the time, the central bank ordered the suspension of bank accounts owned by supporters of the ENDSARS movement prompting a move to Bitcoin (BTC) and crypto donations.

As previously reported by ooduarere, Bitcoin adoption in Nigeria continues to increase. By data from Google Trends, Nigeria is still number 1 on the planet with regards to search interest for Bitcoin.

The CBN’s ban can also be similar to those things taken by its Indian counterpart, the Reserve Bank of India, back 2018. 2 yrs later, India’s Supreme Court reversed the order.

In addition to the CBN ban, the only real other crypto-related regulatory news ahead out of Nigeria was back September 2020. During the time, the Nigerian Securities and Exchange Commission recognized crypto as securities with plans to formulate a concrete legal framework for digital assets.

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