The sanctions are a part of CBN’s efforts to discourage cryptocurrency usage and to firmly establish commercial restrictions on the cryptocurrency exchange.
The Central Bank of Nigeria (CBN) has penalized three commercial banks in the country for failing to follow a directive from the regulation that prohibits consumers from transacting in cryptocurrencies.
CBN’s Sanctions
According to the latest Bloomberg report, the financial institutions were fined for breaching a cryptocurrency trading restriction levied a year ago. CBN fined Stanbic IBTC Bank, which happens to be the domestic unit of Standard Bank Group Ltd., for 500 million nairas for two accounts alleged to have been used for crypto transactions.
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The filing with Nigerian Exchange Ltd alleged that the country’s biggest lender Access Bank Plc was imposed a penalty of 100 million nairas for failure to terminate user crypto accounts. United Bank for Africa (UBA) incurred a 100 million naira penalty for digital-currency transactions by a customer. Fidelity Bank Plc, the full-fledged commercial bank, on the other hand, was fined 14.3 million nairas.
Chief Executive Officer Wole Adeniyi revealed that Stanbic IBTC followed the central bank regulation, however, the sanctioned transactions may have passed through its system undetected. Adeniyi also said that the central bank was able to identify the relevant transactions due to “advanced capability” that even the lenders in the country do not have access to. The platform has urged the central bank to share the technology. The exec speculated:
“It doesn’t seem that they are going to entertain a refund, but they are now sharing intelligence with us to be able to kind of deter clients.”
Crypto Climate in Nigeria
Nigeria is not particularly a crypto-friendly nation. But the West African country is home to the largest volume of cryptocurrency transactions outside the United States. The continent’s most populous country also accounts for the largest proportion of retail users executing transactions under $10,000, according to the blockchain intelligence platform, Chainalysis.
Last February, CBN released an order to close the accounts of holders involved in transacting in or operating cryptocurrency exchanges. The apex bank had sent the circular to the domestic financial establishments and warned of severe regulatory sanctions if they fail to comply.
Roughly eight months after the ban, Nigeria’s financial regulator-securities,s, and ExchangeCommissionn- had announced setting up a research unit as part of its effort to regulate the industry.
[…] This is a big milestone for the crypto users in the country of Nigeria, especially this time when the banks in the region have been banned from using cryptocurrencies. […]