Home News Nigeria’s central bank reportedly freezes crypto traders’ accounts

Nigeria’s central bank reportedly freezes crypto traders’ accounts

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According to reports, the Central Bank of Nigeria has instructed all commercial banks in the nation to freeze the accounts of at least two people who involved in cryptocurrency trading.

According to a report from Nigerian news outlet Peoples Gazette on Nov. 7, the Director of Banking Supervision, J.Y. Mammanand, issued a notification instructing the central bank to terminate two accused crypto dealers’ accounts. And transfer their cash “in suspense accounts”. The account closures were justified, according to Mammanand, by a Central Bank of Nigeria (CBN) directive published in February.

Volatility, money laundering, and terrorist funding

According to reports, the action is part of a bigger effort by banking regulators to cancel accounts held by Nigerian people or firms “transacting in or operating cryptocurrency exchanges” through local banks. The Central Bank of Nigeria (CBN) barred banks from providing services to cryptocurrency exchanges in the nation in February. Citing worries about volatility, money laundering, and terrorist funding. Governor of the Central Bank of Nigeria, Godwin Emefiel, later stated that the majority of crypto transactions in the country’s commercial banks were “illegitimate”. Meaning they were in use to fund illegal activities.

Despite the central bank’s steps, Nigeria’s crypto market has grown to become one of the continent’s largest. With the continent’s entire retail transaction volume increasing by over 1,200% between July 2020 and June 2021. In August, however, the country had the world’s second-largest market for peer-to-peer bitcoin (BTC) trading.

Furthermore, receiving authorisation from the Nigerian Federal High Court in October, the CBN is ready to launch the country’s central bank digital currency, the eNaira. The eNaira is being promoted as a quicker, cheaper, and more secure way to conduct financial transactions. Although it is expectable to coexist with Nigeria’s fiat currency.

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