CBN Defends Clampdown on Cryptocurrency, Says Nigerian Banking Sector Has No Room For 'Illegal' Trading

CBN Defends Clampdown on Cryptocurrency, Says Nigerian Banking Sector Has No Room For 'Illegal' Trading

  • In the midst of the cryptocurrency market's rise, Nigeria's central bank has tightened its restriction on cryptocurrency usage
  • Godwin Emefiele, defending the measure, stated that cryptocurrency is largely utilized for criminal acts that cannot be tolerated
  • Emefiele contended that he has yet to see a government use cryptocurrencies as legal cash for transactions and no credible investors will want to be associated with it

The Central Bank of Nigeria has justified its ban on cryptocurrency trading in Nigeria, claiming that the industry and its participants are "embedded in illegality."

The Governor of the Central Bank of Nigeria, Godwin Emefiele, expressed his disapproval while speaking with Arise TV on Tuesday, 16 November 2021.

According to Emefiele, the directive to deposit banks to close the accounts of cryptocurrency dealers is to protect Nigerians and the banking space has no room for cryptocurrency.

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CBN defends clampdown on cryptocurrency says Nigerian banking sector has no room for 'Illegal' trading
CBN's governor Godwin Emefiele speaks Photo Credit: Chris J. Ratcliffe
Source: Getty Images

The CBN had in February ordered banks not to support payment transactions of crypto firms.

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Emefiele also noted that the assumption that the new directive was malicious and linked to his personal reservations about the #EndSARS movement which was reportedly financed partially with cryptocurrencies was wrong.

He said:

“The #EndSARS issue came up in October 2020 and we came up with the issue of saying that we would not make our banking and payment system space available to those who were involved in cryptocurrency business because we feel that a substantial portion of the transactions going on there are illegal.
“Look at it this way: what is there to hide? Why are the transactions so hidden? Why are they encrypted? If I conduct a transaction and a regulator or security authority wants to see the nature of the transaction, those (transactions) can’t be encrypted for people to know what happened. It means that cryptocurrency is a product that is embedded in high level of illegality.

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"#EndSARS has nothing to do with it. It so happened that some people used their cryptocurrency to fund it but it has nothing to do with it."

He also said that he has yet to see a government in the globe demonstrate support for cryptocurrency.

Emefiele added:

"In fact, I have not seen more than one or two countries that have supported cryptocurrencies. You will not find developed economies or economies where high level of payment standards is put in place where the government is serious about tackling money laundering; you won’t find central banks in those climes supporting cryptocurrency."

Court unfreezes two Nigerian companies bank accounts blocked by CBN for cryptocurrency had earlier reported that three months after the Central Bank of Nigeria (CBN) urged a federal court in Abuja to freeze accounts of some fintech firms in the country, another federal High Court sitting in Abuja has instructed the accounts of two fintech firms held in Zenith and Guaranty Trust Bank be unfrozen.

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CBN had approached the court in August 2021 to get an interim order to freeze the accounts which it said are owned by individuals and organizations based in the United States.

Rise Vest Technologies Ltd, one of the firms affected, had dragged CBN to court seeking a reversal of the ban on its account.


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