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Again, CBN Justifies Stance On Prohibition Of Cryptocurrencies In Nigeria

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, on Tuesday stoutly justified its monetary’ policy forbidding crypocurrencies transactions in Nigeria, saying trading in the virtual assets is illegal and has no place in Nigeria’s monetary system.

Emefiele, who re-affirmed the apex bank’s policy stance against the virtual currencies when he appeared before the Senate Joint Committee on Banking, Insurance, and other financial institutions on Tuesday, maintained that money laundering, terrorism financing, and other criminal activities were being carried out using the digital currency.

Describing the operations of cryptocurrencies as dangerous and opaque, the banker explained to the lawmakers that the use of cryptocurrencies contravened existing law on currency management in the country.

Specifically, the apex bank’s chief pointed out that given the fact that cryptocurrencies were issued by unregulated and unlicensed entities operating outside Nigeria, this made the use of such virtual assets contrary to the mandate of the bank, as enshrined in the CBN Act (2007) declaring the Bank as the issuer of legal tender in Nigeria.

Emefiele, who spoke elaborately on the differences between digital currencies which central banks can issue and cryptocurrencies beign issued by unknown and unregulated entities, stressed that the anonymity, obscurity and concealment of cryptocurrencies made it suitable only for those who indulge in illegal activities such as money laundering, terrorism financing, purchase of small arms and light weapons and tax evasion.

The CBN governor maintained that cryptocurrency is not legitimate money because it is not created or backed by any Central Bank.

He said: “Cryptocurrency has no place in our monetary system at this time and cryptocurrency transactions should not be carried out through the Nigerian banking system.”

The apex bank had on February 5, directed all deposit money banks in the country to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

Since then the CBN’s policy directive has continued to enjoy the support of relevant regulatory and other institutions, including the Securities and Exchange Commission (SEC), the Nigeria Financial Intelligence Unit (NFIU) and the Independent Corrupt Practices Commission (ICPC), amongst others.

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