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Nigerian Central Bank bans Bitcoin and virtual currency

Nigerian Central Bank bans Bitcoin and virtual currency

The Central Bank of Nigeria (CBN) has barred deposit taking banks and all other financial institutions from the operation of any form of virtual currency.

image of bitcoin

Nigerian Central Bank bans Bitcoin and virtual currency

The warning by the Apex bank was contained in a circular by the CBN Director of Financial Policy and Regulation Department, Kevin Amugo.

Virtual currency (VCs) such as bitcoin, ripple, magneto, litecoin, dogecoin, peercoin, one-line, and others, have not been recognised as legal tender in Nigeria but which are already being traded in exchange platforms that are unregulated all over the world.

A virtual currency or virtual money has been defined in 2012 by the European Central Bank as “a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.

The CBN circular explained that because these payments and exchanges using VCs were largely untraceable and anonymous, making them susceptible to abuse by criminals, especially in money laundering and terrorism, the VCs should not be accepted by any bank or finance house.

The circular stated in part: “The attention of banks and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation decision by the CBN.

Ensure that you do not use, hold, trade, and/ or transact in anyway in virtual currencies; Ensure that existing customers, that are virtual customers exchangers, have effective AML/CFT controls that enables them to comply with customers’ identification, verification and transaction monitoring requirements.”

Others directives include: Where banks or financial institutions are not satisfied with controls put in place by the virtual currency exchangers/customers the relationship should be discontinued immediately, and lastly, Any suspicious transactions by these customers should immediately be reported to the Nigerian Financial Intelligence Unit (NFIU).

The post Nigerian Central Bank bans Bitcoin and virtual currency appeared first on Payments Cards & Mobile.

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