The Nigerian central bank has frozen the accounts of two individuals and one company that it claims has allegedly engaged in cryptocurrency trading. The bank claimed that this violated a circular it published in February against Bitcoin trading. The central bank issued a ’Post-No-Debit’ circular last week to all commercial banks to shut down accounts of the three entities, the local outlet People’s Gazette reports.
Banks are required to shut down accounts that deal in cryptocurrencies.
The CBN’s circular was signed by its Director of Banking Supervision, J. Y. Mammanand. In its circular, the central bank referenced a February order in which it directed all banks to shut down accounts used in any digital currency transactions. The February circular specifically urged all financial institutions to “identify persons and entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.” The accounts that were shut down belonged to a firm called TVS Hallmark Service Limited and two individuals—Nwaorgu Kingsley Chibuzor and Nnamdi Francis Okereke.
Cryptocurrency trading in Nigeria is soaring.
The fresh ban for the three entities allegedly dealing in cryptocurrencies comes at a time when digital currency trading in Nigeria is soaring. The West African country leads the continent in trading volume and is one of the biggest P2P markets globally. Nigeria also launched its eNaira recently, becoming the first country in Africa to have its own CBDC. After the ban on financial institutions from providing services to crypto firms, peer-to-peer transactions reportedly account for the bulk of the country’s crypto trading activity. Cheaper remittance costs and currency devaluation continue to drive crypto adoption in Nigeria despite the CBN ban. Nigeria also launched its CBDC this year.