The Central Bank of Nigeria (CBN) surprisingly issued a circular last Friday prohibiting regulated financial institutions from facilitating payments for cryptocurrency exchanges. Note that the new order from the Central Bank of Nigeria is a follow-up to the 2017 circular that cautioned financial institutions and Nigerian citizens against the risk of cryptocurrency transactions.
In the directive, CBN also wrote: “All Deposit Money Banks, Non-Bank Financial Institutions, and other financial institutions are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.” It is said that anyone who disobeys this order will face “severe regulatory sanctions.”
In response to this restriction, major exchanges like Binance have suspended NGN deposits temporarily. The exchange said in a statement that “Binance will temporarily suspend NGN deposits through our fiat partner channels. Withdrawal services remain normal and will continue to be processed but might take slightly longer time than usual. We apologise for any inconvenience this may cause.”
What does this mean to Crypto users?
It is without a doubt that several Nigerians are relying on the crypto economy to make a living. Thus, the loss of bank payments as an option poses a huge hindrance for Nigerian crypto users. However, crypto users took to Twitter with the hashtag #WeWantOurCryptoBack to protest the directive.
Nevertheless, Nigerians have alternative payment methods, like gift cards, to acquire bitcoin or other digital currencies. However, this is a lesson for crypto exchanges across the globe to support more payment methods beyond bank-based financial transfers. For instance, Paxful is leading the way with over 300 payment methods accepted on the P2P marketplace for its users.