Bello Hassan, Central Bank of Nigeria’s banking supervision director, signed a letter last week directing all banks to stop providing payment services to crypto exchanges. The central bank also called on banks to expose any individual or entity running such accounts. Failure to comply, it warned, could see banks hit with strict sanctions. CBN cited Warren Buffett’s “rat poison squared” description of crypto in its statement. The regulator also pointed to China, which has banned crypto exchanges in favor of a central bank-backed digital currency.
Nigeria is one of the world’s largest users of virtual currencies.
African country Nigeria is one of the world’s largest users of virtual currencies, pointing to the sheer impact of a crypto-wide bank-backed account ban. According to a Statista report published late last year, almost a third of Nigerians use or own cryptocurrency. And in the first quarter of 2020, Nigeria saw an increase of 210.6% in 18 to 24-year-old crypto users, per a Coinmarketcap report. According to a local Nigerian news outlet, Providus Bank has since closed its virtual bank accounts. Various fintech players use these virtual accounts to provide crypto-based and standard investment and savings services.
Binance also stops deposits in Nigerian Naira.
As reported earlier, Binance announced in a statement that its Nigerian naira payment partners suspended deposit services until further notice, starting from 7 p.m. local time (GMT+1) as of Friday, adding that it is monitoring the situation closely. While the move might impact fiat on- and off-ramps, most of the nation’s crypto trading occurs on peer-to-peer platforms and remains unaffected, according to sources in Nigeria. Since the letter started making rounds on the internet, Nigerian crypto users tweeted the hashtag WeWantOurCryptoBack over 26,000 times, according to data obtained from SproutSocial.