CBN Barred Transactions of Virtual Currencies In Nigeria Financial Institutions
Tunde Raji - January 19, 2017

The Central Bank of Nigeria (CBN) has barred deposit money banks and all other financial institutions from transacting in any form of virtual currency.

 

It was disclosed in a circular by the CBN Director of Financial Policy and Regulation Department that Virtual currencies such as Bitcoin,  Onecoin, Litecoin, Perfect Money, and many more…have not been recognized as legal tender in Nigeria but are already being traded in exchange platforms that are unregulated all over the world.

 

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

 

The CBN circular emphasized that these virtual payments and the platforms using virtual currencies are physically untraceable and anonymous. This makes it susceptible to abuse by criminals, especially in money laundering and terrorism. Hence, the virtual currencies should not be accepted by any bank or finance house in Nigeria.

 

The circular states thus: “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 includes: 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.

Lastly, any suspicious transactions by these customers should immediately be reported to the Nigerian Financial Intelligence Unit (NFIU).”

 

SOURCE: GUARDIAN

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