SEC – The Nigeria’s apex bank (CBN) has remained silent on lifting crypto ban despite the Securities and Exchange Commission commitments to issue cryptocurrency regulations in the sector.
Following the regulation, everyone expected the CBN to discuss a way forward during its Monetary Policy Meeting recently to complement the effort of the Commission.
However, its continued silence is an express indicator that cryptocurrency remains banned and as such banks are prohibited from enabling such transactions.
The Central Bank of Nigeria took a definite stance on cryptocurrency running 5 years now, first dated back to January 12, 2017.
The prohibition was announced and issued in the below sequence,
- In 2017, the prohibition was issued by Mr. Kelvin Amugo, Director, Financial Policy and Regulation Department, CBN, who said the ban was necessary due to the money laundering and financing risks that could be promoted by virtual currency operations
- Subsequently, in 2018, the CBN released a complementary statement to uphold its initial stance that cryptocurrencies are not legal tenders hence remain illegal to operate, hence, stand banned
- The last stroke that did a final damage was the reminder of the 5th February 2021 to Nigerian commercial banks to stick to the 2017 guideline on crypto ban where accounts participating or enabling crypto assets should be reported and blocked with immediate effect.
In contrast to this, the SEC responded that there’s no policy conflict whatsoever between the Capital market apex regulator and the Central bank of Nigeria over the ban placed on cryptocurrency transactions in the banking industry.
SEC in its statement indicates that, as regards its recent policy procurement, it becomes necessary to clarify that the CBN circular of February 5, 2021, did not place any new restrictions on cryptocurrencies, in this case all banks in the country had earlier been forbidden, through the apex bank’s circular dated January 12, 2017, not to use, hold, trade or transact in crypto assets.
What this means
- Following the apex bank’s resolve to hold onto its decision, this means that the Nigeria’s commercial banks would maintain status, treat crypto related transactions as forbidden.
- As a way to buy, sell and hold crypto assets, the P2P crypto platforms will continue to provide succor as a veritable means to treat this transaction without running into troubled waters.
- For cryptocurrency exchanges in Nigeria, this decision the dual policy frame constitute a major confusion in the sector given that SEC’s regulation implore exchanges to deposit money in the bank.
- Various Nigerian banks on private inquiry by concerned outfits responded to this development in the negative which means there’s no signal from the Central bank to go contrary to its initial directives.
- Crypto exchanges looking to conduct business in Nigeria may not throw in their weights in full swing.
The Central bank of Nigeria has not bulged on its ban on digital assets within the Nigeria’s financial system purposely the Deposit Money banks/commercial banks, etc.
The Securities and Exchange Commission has done a reasonable job by providing a regulatory framework for digital assets, hence, the apex bank is expected to look into the economic impact of its decision and strike a possible balance for an evenly spread and promotion of financial prosperity among Nigerians.