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Bitcoin and other virtual currencies not legal tender in Nigeria – CBN

The Central Bank of Nigeria (CBN), has ruled out transactions in bitcoin and other virtual currencies by any bank in the country.

In a circular from CBN to all banks on Tuesday, signed by its Director of Financial Policy and Regulation Department, Kelvin Amugo, said the move
was made because of money laundering and terrorism financing risks inherent in operations of virtual currencies.

“The emergence of Virtual Currencies (VCs) has attracted investments in payments infrastructure that provides new methods of transmitting value over the internet.” Amugo said.

“Transactions in VCs are largely untraceable and anonymous making them susceptible to abuse by criminals, especially in money laundering and financing of terrorism. He added.

“VCs are traded in exchange platforms that are unregulated, all over the world. Consumers may, therefore, lose their money without any legal redress in the event these exchanges collapse or close business.

“The development of VCs Payment Products and Services (VCPPS) and their interactions with other New Payment Products and Services (NPPS), give rise to the need for guidance to protect the integrity of the Nigerian financial system. There is, therefore, the need to address the Money Laundering/Terrorism Financing risks associated with VC exchanges and any other type of institutions that act as nodes, where convertible VC activities intersect with the regulated fiat currency financial system.

“The attention of banks and other reporting financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation or decision by the CBN.”

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