The Senate has invited the Central Bank of Nigeria (CBN)’s Governor, Godwin Emefiele, to appear before its committees on the opportunities and threats of cryptocurrency on the country’s economy.
The red chamber took the decision to invite the CBN governor following a motion by a Federal Lawmaker, Senator Istifanus Gyang, during a plenary on Thursday, concerning the CBN directive asking financial institutions to stop all transactions in cryptocurrencies and matters relating to them.
In their contribution, the Federal Lawmakers urged the apex bank to be cautious, noting that while cryptocurrencies have their negative sides, it has become the fastest-growing form of the transaction all over the world.
The upper chamber argued that technology has changed the way of conducting business in Nigeria and Nigeria cannot run away from cryptocurrencies. Some of the lawmakers then called for regulations.
On Friday, the CBN ordered all banks to close accounts of anyone who transacts in cryptocurrency.
This was contained in a circular sent to banks and other financial institutions, it was signed on Friday by the Director of Banking Supervision, Bello Hassan. The directive is expected to immediately take effect.
The CBN directive contained that dealing in cryptocurrency or facilitating payments for cryptocurrency exchange was henceforth prohibited.
“The Central Bank of Nigeria circular of January 12, 2017, ref FPR/DIR/GEN/CIR/06/010 which cautioned Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), other Financial Institutions and members of the public on the risk associated with transactions in cryptocurrency refers,” the statement said.
“Further to earlier regulatory directions on the subject, the bank hereby wishes to remind regulated institutions dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.
“Accordingly, all DMB’s NBFI’s or OFI’s are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately.
“Please, note that breaches of this directive will attract severe regulatory sanctions. This letter is with immediate effect.” The circular read.
The apex bank added that the use of cryptocurrencies in Nigeria contravenes existing laws.
The CBN warned Deposit Money Banks (DMBs) to desist from transacting cryptocurrencies and dealing with entities involved in it.
It noted that cryptocurrencies are, “issued by unknown and unregulated entities” and are being used to carry out “many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion.”
Emefiele will be appearing before the committees on banking, ICT, Cybercrime, and Capital market. The committees are to report back to the Senate in two weeks.
