CBN defends action on crypto currency

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    The Central Bank of Nigeria, CBN, says the directive restricting banks from crypto currencies transaction is necessary to forestall illegal activities and risks in the system, to mention but a few.

    In a statement, the apex bank said crypto currencies are increasingly being used for money laundering, terrorism financing and other criminal activities

    “The recent regulatory directive became necessary to protect the financial system and the generality of Nigerians (including the youth population) from the risks inherent in crypto assets transactions, which have escalated in recent times, with dire consequences for the integrity of the financial system and financial stability.” The statement read.

    “In light of these realities and analyses, the CBN has no comfort in crypto currencies at this time and will continue to do all within its regulatory powers to educate Nigerians to desist from its use and protect our financial system from activities of fraudsters and speculators.” The apex bank said.

    The CBN explained that the recent policy pronouncement did not place any new restrictions on crypto currencies, as all banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, not to use, hold, trade and or transact in crypto currencies, noting that its position on crypto currencies in not an exception as many countries, central banks, international financial institutions and economists have also warned against its use.

    “China, Canada, Taiwan, Indonesia, Algeria, Egypt, Morocco, Bolivia, Kyrgyzstan, Ecuador, Saudi Arabia, Jordan, Iran, Bangladesh, Nepal and Cambodia had all placed certain level of restrictions on financial institutions facilitating crypto currency transactions.” The apex bank said.

    Crypto currencies are digital or virtual currencies issued by largely anonymous entities and secured by cryptography. Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability, and government regulation. Bitcoin was the first crypto currency to be introduced in 2009, and its value now accounts for about 68 percent of all the existing crypto currencies in the world.

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