The Prohibition of Cryptocurrency Transactions by the Central Bank of Nigeria

Abstract

Cryptocurrencies, albeit non-physical currency, are now globally accepted mediums of exchange, with Nigeria inclusive. However, in Nigeria for a long period, this means of exchange assumed a legal status. This is because of the absence of a regulatory framework governing its usage and exchange; hence, a cloud of uncertainty and ambiguity hovering over its legality in Nigeria. Regulatory bodies in Nigeria even issued warning against its use and exchange. A glimmer of hope came when the Securities and Exchange Commission (SEC) of Nigeria, classified cryptocurrencies as securities, hence, suggestive of the end of a somewhat long-awaited likely regulatory system. Then the wind was seemingly knocked out of the sail of the exchange of cryptocurrency when the Central Bank of Nigeria(CBN), addressed a letter recently to banks and other financial institutions, stating that dealing in cryptocurrencies and facilitating payment for exchanges are prohibited.