Nigerian financial authorities recently called for all financial institutions to suspend all accounts that have cryptocurrency deposits. Additionally, the Central Bank of Nigeria(CBN) is currently holding investigations on accounts trading crypto. The CNB Director of Communications, Osita Nwanisobi, claims the move is meant to secure Nigerians from the allegedly ‘fraudulent’ history of digital assets.
The CBN stated that it does not feel comfortable allowing Cryptocurrency’s circulation to happen within the country. The financial authority issued a statement that shed light on the disadvantages of using Cryptocurrency, including money laundering due to its anonymity feature.
Other financial regulators, such as the Association of Bureaux De Change Operators of Nigeria(ABCON), have joined CBN in the fight against Cryptocurrency in Nigeria. However, the policy has sparked several complaints from cryptocurrency enthusiasts and financial critics.
Nigeria’s Fear for Crypto Adoption
CBN has warned several financial institutions of the repercussions that handling decentralized digital assets poses. According to the local Nigerian Newspaper THISDAY, CBN will block accounts that hold crypto intending to commit fraudulent financial activities.
In an interview with THISDAY, Mr Nwanisobi said, “Cryptocurrency is now the easiest way for people to launder money, without central bankers discovering what they are doing. It has also been seen as a way of financing terrorism.” He also mentioned that several countries, including China, have banned crypto but legalized digital fiat currency under several regulations.
The move by Nigeria’s financial regulator shows how many countries are afraid of adopting Cryptocurrency. It is quite perplexing how crypto enthusiasts like famous businessman and Billionaire Elon Musk think that Bitcoin will become a reserve currency one day, pending how countries like Nigeria are against crypto.
Nwanisobi believes that people adopt decentralized currencies because they are making transactions that regular currencies couldn’t possibly make. He also brought up a query asking if anybody has disputed or criticized the use of a legal tender or Naira. On behalf of CBN, Nwanisobi stated that no financial entity is allowed to exchange crypto to Naira because the crypto source is unknown.
Is Cryptocurrency a Threat to Financial Systems?
The CBN said that many respectable merchants and investors had shied away from crypto because of its reputation to serve illegal transactions. Nevertheless, the US Office of the Comptroller of the Currency is urging investors to adopt digital assets. The OCC recognized that banks are wary of crypto because it seems too risky for them, but it will provide regulations to keep banks safe.
The OCC and CBN stand at very different ends on the use of Cryptocurrency. Still, quite a number of people are scared to involve their financial capabilities within the cryptocurrency ecosystem.