Nigerian Fintech Firms Tighten Restrictions on Crypto Transactions Following CBN Directive

Nigerian fintech firms have reportedly begun to tighten restrictions on crypto transactions in the country, following a directive from the Central Bank of Nigeria (CBN).

The CBN has ordered fintechs to clamp down on any transactions labeled as crypto transactions and report to relevant authorities, after the Apex bank alleged that a lot of crypto traders in the country were leveraging on several of these platforms to disrupt the forex market. 

This directive has prompted several fintech platforms in Nigeria which include Kuda, Moniepoint, Opay, and Palmpay to temporarily halt the opening of new accounts for customers. 

In line with this Moniepoint and Paga have further notified their customers that their accounts risk being blocked if they facilitate crypto transactions with it.

In the notification sent to customers on May 2, 2024, Moniepoint wrote,

“In line with CBN regulation, we will close the account of anyone engaging or other virtual assets transactions and share their details with relevant authorities.”

Also, Paga sent a similar message to their customers which reads,

“Pursuant to the CBN circular with reference FPR/DIR/GEN/CIR/06/10, we wish to remind you that dealing in or facilitating transactions in cryptocurrency and other virtual currencies is not permitted.”

The proposed ban on P2P trading is based in the CBN’s assertion that crypto traders exploit this method to manipulate the Naira through pump and dump schemes. Interestingly, Nigeria’s National Security Adviser (NSA) is set to label crypto trading as a national security threat.

The CBN directive on restriction of crypto transactions shows a reversal of the apex bank’s previous announcement to lift its crypto ban imposed in 2021. 

Recall that in December 2023, the CBN rolled out a circular mandating financial institutions to open accounts, provide designated settlement accounts and settlement services, and act as channels for forex inflows and trade for firms transacting in crypto assets.

However, with the recent reversal of the ban on crypto platforms and transactions, the Nigerian government has expressed concerns about its effects on the devaluation of the Naira, amidst other challenges.

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