The Central Bank of Nigeria (CBN) has again said virtual currencies are not legal tender in Nigeria.
The apex bank warned Nigerians to be wary of investments in cryptocurrency.
The apex bank, disclosed this in a document provided by the Bank on Wednesday, where it reiterated that cryptocurrencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and Exchanges such as NairaEx were not licensed or regulated by the CBN.
The statement signed by the Bank’s Acting Director in charge of Corporate Communications, Isaac Okorafor, emphasized that dealers and investors in any kind of crypto currency in Nigeria were not protected by law, thus may beunable to seek legal redress in event of failure of the exchangers or collapse of the business.
The CBN therefore warned Nigerians against investing in cryptocurrency as doing so would be at their own risk.
It would be recalled that the CBN on January 12, 2017, issued a circular to Banks and other financial institutions on virtual currency operations in Nigeria.
In the 2017 circular signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, the CBN had among other issues noted that virtual currencies were traded in exchange platforms that are unregulated, all over the world.
The bank further noted that transactions in virtual transactions in virtual currencies were largely untraceable and anonymous thereby making them susceptible to abuse by criminals , in money laundering and financing of terrorism.
Meanwhile, findings have showed that Nigerians have continued to invest in cryptocurrency, trading up to N1.38 billion across 13 local cryptocurrency exchanges in the country, despite warnings by regulators and legislators.
A software developer and chief architect at Cymantiks Nigeria Limited, Emeka Okoye, had earlier in February urged the government and particularly the CBN and the Nigeria Deposit and Insurance Corporation (NDIC) who have been at the forefront in the fight against cryptocurrency in the country to do a rethink on the way to regulate the use of cryptocurrency
Noting that cryptocurrency will not take the place of fiat money, he said the criticism against cryptocurrency will further fuel speculation and encourage its use by outlaws.
Similarly, the International Monetary Fund (IMF) had recently urged governments to look into regulation of cryptocurrencies in the fight against money laundering and financing terrorism.
Many countries in recent times are coming up with stronger regulations for the trading of cryptocurrencies. Although the value of Bitcoin which is the most popular and most traded cryptocurrency has been down since December, 2017, interest in the currency is yet to wane in Nigeria.
Having seen the highest weekly trading average of N1.94 billion in mid-December last year, weekly average turnover had dropped to N1.299 billion at the end of December before rising to N1.817 billion in January.
As at February 12, 2018 which is the latest data on Coin.dance a global cryptocurrency tracking website weekly average of Bitcoin trading on the exchanges in Nigeria was at N1.389 billion. This is asides the investments of Nigerians in other cryptocurrencies such as Ethereum, Billioncoin amongst others.
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