Moniepoint and Paga, two prominent financial services providers in Nigeria, have notified customers of account closure if found facilitating cryptocurrency transactions.
The move follows the recent directive from the Central Bank of Nigeria (CBN) instructing certain banks, including Moniepoint, to halt new customer onboarding.
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This development marks a significant reversal from the CBN’s previous announcement to lift the ban on cryptocurrency transactions, which was imposed in 2021. In the notification sent to customers on May 2, 2024, Moniepoint explicitly stated, “In line with CBN regulation, we will close the account of anyone engaging in cryptocurrency or other virtual assets transactions and share their details with relevant authorities.”
Similarly, Paga, in an email to customers, emphasised its licensing by the CBN and the need for compliance with all regulatory requirements. The email stated, “Dealing in or facilitating transactions in cryptocurrency and other virtual currencies is prohibited.”
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The reference made by Paga to a 2017 CBN circular underscores the regulatory ambiguity surrounding cryptocurrency transactions in Nigeria. While the 2017 circular cautioned against dealing with cryptocurrency, a newer circular issued in December 2023 mandated financial institutions to facilitate transactions involving crypto assets.
The 2023 circular superseded both the 2017 directive and the 2021 circular that restricted banks from operating accounts for cryptocurrency service providers. This recent announcement by Moniepoint and Paga suggests a potential reinstatement of the crypto ban imposed in 2021.
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Impact on FX Transactions
These directives are part of broader efforts by the CBN to combat illegal foreign exchange (FX) transactions in Nigeria. However, they may inadvertently drive cryptocurrency usage beyond government oversight, complicating efforts to regulate digital asset usage in the country.
While Moniepoint’s compliance with CBN directives is evident, the conflicting signals from regulatory authorities add uncertainty to the status of cryptocurrency transactions in Nigeria. As the situation unfolds, stakeholders await further clarity on the regulatory landscape governing digital assets in the country.