Cryptocurrency ban to protect banks, youths, says CBN

The Central Bank of Nigeria (CBN) has justified recent directive banning banks and other financial institutions from facilitating transactions in cryptocurrency.

In a statement yesterday, it explained that its action was aimed at protecting both the banks and youths against the emerging risks in digital currency trading.

The statement signed by the Acting Director, Corporate Communications, Osita Nwanisobi, noted that the directive was not new, as a similar circular issued in 2017 had prohibited the banks from engaging in the transaction.

“The recent regulatory directive became necessary to protect the financial system and the generality of Nigerians (including the youth population) from the risks inherent in crypto assets transactions, which have escalated in recent times, with dire consequences for the integrity of the financial system and financial stability.

“Due to the fact that cryptocurrencies are largely speculative, anonymous and untraceable, they are increasingly being used for money laundering, terrorism financing and other criminal activities. Small retail and unsophisticated investors also face a high probability of loss due to the high volatility of the investments in recent times,” the apex bank said.

The bank added that the reactions trailing the directive warranted the justification.

This comes as many banks, at the weekend, took down transaction platforms in line with the regulation.