The rules around cryptocurrencies in Nigeria have become clear as a senior official from the Central Bank of Nigeria (CBN) clarified that digital currencies are not banned in the country.
According to local publication TodayNG, Adamu Lamtek, the Deputy Governor of the monetary regulator, said that the CBN did not ban Nigerians from buying, selling or holding cryptocurrencies but protected the banking sector from the activities of cryptocurrencies.
Additionally, he clarified that the central bank did not place any restrictions on cryptocurrencies in general and is not discouraging people from trading them.
“What we have just done was to prohibit transactions on cryptocurrencies in the banking sector,” the deputy governor said.
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The Nigerian central bank issued a circular earlier in February ordering all banks and other regulated financial institutions to cease their dealings with any cryptocurrency exchanges and accounts dealing in digital currencies.
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The CBN warned that violation of its rules will bring ‘severe regulatory sanctions’ on regulated entities.
This step created confusion among the country’s other financial regulators. The Nigerian Securities and Exchange Commission, which oversees the country’s financial markets, had to scrap plans of bringing regulations for cryptocurrency markets.
Nigeria is one of the top countries with heavy retail demand for cryptocurrencies. According to market data compiled by Coin Dance, the number of Bitcoins that were traded in Nigeria in the last five years is slightly behind the United States.
The local crypto community reacted strongly against the ban, running social media campaigns and has migrated to peer-to-peer platforms.
The clarification from the central bank Deputy Governor came when there were confusions around the ban, and many scammers are trying to take advantage of the situation.