According to a statement signed by Bello Hassan, Director of Banking Supervision of the Central Bank of Nigeria, banks and other financial institutions are prohibited immediately from dealing in cryptocurrency trade.

According to the statement, failure to comply with the directive will result in “severe regulatory sanctions”.

Bloomberg reported that Nigeria’s Securities and Exchange Commission said in September 2020, it would regulate trade in digital currencies to provide protection for investors and to ensure that transactions are transparent.

The tough stance by the central bank of Nigeria comes after protests in October against the excesses of the police’s Special Anti-Robbery Squad, known as SARS, which saw organizers accepting Bitcoins for funding after the government allegedly blocked local payment platforms for collecting donations.

Statement from Central Bank of Nigeria
Statement from Central Bank of Nigeria

"The Central of Bank of Nigeria's (CBN) circular of January 12, 2017 ref FPR/DIR/GEN/CIR/06/010 which cautioned Deposit Money Banks (DMBs). Non-Bank Financial Institutions (NBFIs). Other Financial Institutions (OFIs) and members of the pubic on the risk associated with transactions in cryptocurrency refers," the CBN said in a statement.

"Further to earlier regulatory directives on the subject, the Bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.

"Accordingly, all DMBs. NBFis and OFls are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately. Please note that breaches of this directive will attract severe regulatory sanctions".