KYC goCBN shuts out KYC services from Fintech startups – Group bemoan attack
KYC services – CBN in its quest to maintain a healthy and airtight economy seems to have opened yet another chapter of controversy with the nation’s Fintech startups companies on the aftermath of crypto ban in Nigeria.
Against the usual practice, the Central Bank of Nigeria has further suspended the provision of bank verification number (BVN) service to all Fintech companies and their third party partners.
This singular decision indicates that Fintechs and crypto startups inclusive will no longer have access to customer’s identity verification aimed at safe guarding and checkmating fraudulent activities within the crypto community.
KYC services means “Know Your Customer,” to this end, customer identification and verification process may no longer be available and effective, since Fintechs and startups now lose the right to use such medium.
There’s an on-going decision by the federal government to change the Nigerian identification system, according to a report, this decision may not be unconnected with this latest development.
According to this source:
“Over the last few months, the federal government has been changing the unique means of identification of all agencies, parastatal and industries to National Identification Numbers (NIN). Examples include UTME/JAMB registration, voter registration, banks and SIM cards.”
In the light of this development, a number of figure heads in the Nigerian cryptocurrency industry made their remarks on the CBN latest decision which suspended KYC services, where some think the decision to suspend KYC is not specifically targeted at the crypto industry.
However, some think, it’s a continuation of the latest crackdown on bitcoin in Nigeria by the apex bank.
Recall, in February 2021, the Central Bank of Nigeria reiterates its commitment to shut out crypto trading from the Nigerian financial institutions, where it passed a directive to the deposit money banks to shut down all accounts associated with cryptocurrency and report such subsequently as will be meted with stiff sanctions.
A number of accounts went down on the aftermath of this directive, Nigerians as usual took to different social media platforms to call out the decision by the apex bank as wicked, nefarious and insensitive to modern developmental strides and youths economic initiative.
Nigerian youths apparently were benefiting from crypto trading, a means everyone saw as an alternative to government’s inability to provide gainful employment to the populace.
On the recent decision on KYC, some players are bent on the fact that the move is a continuation of CBN policies that seek to stifle innovation and to block young people from participating in the economy.
A crypto thought leader “Nathaniel Luz” lamented the CBN’s latest move is a clash between “Old and new money”
In his remark, he bemoans the suspension of BVN service shows that the CBN continues to use the same playbook to frustrate younger Nigerians.
In his words:
“There’s a handwriting on the wall, the fact that most traders on the Nigerian Stock Exchange (NSE) are over 50 years and there’s no pipeline for young people flowing.
Old men are trying to use every means possible to frustrate new money guys from economic independence. This is very specific knowing that this is a decade where we expect a global shift in wealth transfer.”
This befalls the Nigerian crypto community at about time she’s trying to recover from the initial sledge hammer of February the 5th 2021 directive.
Peer-2-peer platforms are gradually beginning to provide answers to these difficult questions, then comes the KYC services suspension, how the industry will navigate out of this too is left to be seen.