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Bitcoin, other virtual currencies not legal tender in Nigeria CBN

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NEWS: Bitcoin, other virtual currencies not legal tender in Nigeria CBN [New Others News] » Naijacrawl
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The Central Bank of Nigeria (CBN), has ruled out transactions in bitcoin and other virtual currencies by any bank in the country.




The apex bank, in a circular to all banks on Tuesday, signed by its Director of Financial Policy and Regulation Department, Kelvin Amugo, said the move was necessitated by money laundering and terrorism financing risks inherent in operations of virtual currencies.

Amugo added: The emergence of Virtual Currencies (VCs) has attracted investments in payments infrastructure that provides new methods of transmitting value over the internet.

Transactions in VCs are largely untraceable and anonymous making them susceptible to abuse by criminals, especially in money laundering and financing of terrorism.

VCs are traded in exchange platforms that are unregulated, all over the world. Consumers may, therefore, lose their money without any legal redress in the event these exchanges collapse or close business.

The development of VCs Payment Products and Services (VCPPS) and their interactions with other New Payment Products and Services (NPPS), give rise to the need for guidance to protect the integrity of the Nigerian financial system. There is, therefore, the need to address the Money Laundering/Terrorism Financing risks associated with VC exchanges and any other type of institutions that act as nodes, where convertible VC activities intersect with the regulated fiat currency financial system.

The attention of banks and other reporting financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation or decision by the CBN.

CBN, therefore, advised banks to ensure that they do not use, hold, and transact in virtual currencies.

The apex bank also warned the banks to ensure that existing customers that are virtual currency exchangers have effective AML/CFT controls that enable them to comply with customer identification, verification and transaction monitoring requirements.

Where banks or other financial institutions are not satisfied with the controls put in place by the virtual currency exchangers/customers, the relationship should be discontinued immediately; and any suspicious transactions by these customers should immediately be reported to the Nigerian Financial Intelligence Unit (NFIU), the CBN said.

The apex bank stressed that virtual currencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecion, Onecoin and similar products are not legal tenders in Nigeria, thus any bank or institution that transacts in such business does so at its own risk.

The apex banks directive is coming after the Securities and Exchange Commission, SEC, issued a warning against virtual currencies.

Given that these instruments and the persons, companies or entities that promote them have neither been authorized, nor any guidelines/regulations developed for them by any of the regulatory authorities in Nigeria, there is no protection available to users or investors in these virtual currencies from financial losses if the virtual currencies fail or the companies promoting them go out of business, the commission had said.

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Adike Kizito is a top-rated software developer, blogger, sports, and entertainment lover. He is the CEO of these popular websites Naijacrawl.com and Mp3ager.com. He operates his software developing task through Kizzsoft.com,... Read More

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