Nigeria’s central bank didn’t ban digital currencies, official clarifies

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Nigeria’s central bank didn’t restrict citizens from trading digital currencies, a senior official has clarified. Rather, the bank’s directive only applied to banks, prohibiting them from processing transactions related to digital currencies.

Adamu Lamtek, the deputy governor in charge of corporate services at the Centra Bank of Nigeria clarified the regulator’s stance during a recent event organized by the watchdog, local outlet TodayNG reports.

“The CBN did not place restrictions from use of cryptocurrencies and we are not discouraging people from trading in it. What we have just done was to prohibit transactions on cryptocurrencies in the banking sector,” he stated.

The official reiterated the bank’s message—that the measure was in the interest of Nigerians. Lamtek pointed out that Nigerian digital currency traders were exposed to several risks through digital currencies and that the ban would protect them from many of these.

The official, however, didn’t address concerns that by banning the legal channels, it could push the traders to unregulated platforms that are riskier.

CBN’s clarification will do little to put the minds of Nigerian digital currency users at ease. The lack of access to the banking industry has effectively shut down all on-ramps for the users. These banks are already acting on the directive and are threatening to shut down any digital currency-related accounts.

As one regular trader told Quartz, he had received a number of calls from his bank asking him to quit “illegal trading of crypto or risk losing his account and funds.”

He added, “To bypass banks, we carefully delist crypto-related information from transaction details, or else you’ll be locked out of the system and lose everything. So right now, it’s about our survival, banks don’t want transparency.”

Nigerian exchanges are also devising ways to work around the ban without breaking the law. One of these is the use of global currencies like the U.S. dollar, but as local outlet Tech Cabal notes, this only works for people with foreign bank accounts. Other Nigerian exchanges like Buycoins have launched their own stablecoin, the NGNT, which they claim is pegged to the Naira.

See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers