Additionally, the CBN made it clear in the circular that regulated financial institutions cannot engage in cryptocurrency or help fund cryptocurrency exchanges.
Despite claims to the contrary, the Central Bank of Nigeria (CBN) has denied issuing a mandate mandating that all financial institutions in the country track down customers using cryptocurrency exchanges and put their accounts on Post No Debit (PND) for a period of six months.
When a consumer wants to limit certain transactions on their account, the bank or other financial institution might give a “Post No Debit” command. The account holder is unable to withdraw money or make payments using the impacted account while a PND directive is in effect.
As a result of the central bank’s contradictory statements—first denying the article on X and then claiming the claims were false—there was confusion.
According to the bank, it would take action against anybody it suspects of engaging in illicit Tether transactions on the specified sites, particularly those using P2P techniques.
Additionally, the purported circular forbade regulated financial institutions from engaging in cryptocurrency or enabling payments for cryptocurrency exchanges. But this goes against a previous decision that allowed banks to help with cryptocurrency exchange transactions once a restriction was removed in December 2023.
After almost two years of implementing a blanket prohibition on banks dealing with digital currencies, the Central Bank removed the embargo.
The Central Bank of Nigeria (CBN) acknowledged in a statement at the time that the severe regulations put on financial institutions in 2021 were no longer justified in light of the rising demand and use of cryptocurrency throughout the world.
The government, however, turned its focus to platforms providing cryptocurrency services as a result of the rapid depreciation of the naira and the ensuing inflation rate of 29.9 percent. It took down cryptocurrency trading websites that were known for establishing arbitrary naira values.
Concerns over “suspicious financial transactions” going via Binance Nigeria in 2023 led to the CBN bringing Binance under intense examination.
Unnamed individuals and sources sent $26 billion via Binance in 2023, according to CBN chairman Olayemi Cardoso.
The detention of Binance executive Tigran Gambaryan, who is located in the US, has added another layer of difficulty to the company’s problems in Nigeria. After meeting with Nigerian authorities to discuss Binance’s compliance with regulations, he is now facing five allegations related to money laundering.
After meeting with Nigerian authorities on Binance’s regulatory difficulties, CEO Nadeem Anjarwalla fled and is now facing extradition to his home country of Kenya.
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