Confusion Over Nigeria’s Crypto Directive

Nigeria’s central bank recently found itself at the centre of a controversy involving major cryptocurrency platforms such as Bybit, KuCoin, OKX, and Binance. Reports emerged claiming that the Central Bank of Nigeria (CBN) had issued a directive to regulated financial institutions to monitor and report transactions related to these platforms. However, the CBN swiftly denied these allegations.

The initial report by CoinDesk suggested that a directive was circulated among deposit money banks (DMBs), non-bank financial institutions (NBFIs), and other financial institutions (OFIs) in Nigeria, advising them that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges remains prohibited under Nigerian law. According to the report, the directive also urged these institutions to place accounts associated with crypto transactions under a “Post No Debit” (PND) instruction for six months, warning that any breaches would attract severe regulatory sanctions.

The situation escalated when the CBN’s denial of the directive was briefly deleted from its official channels, only to be reissued later through the social media platform X. This sequence of events added to the confusion and raised questions about the bank’s stance on cryptocurrency regulation.

This incident is part of a broader saga involving Binance and the Nigerian government, which has recently made headlines around the world. The Nigerian government has accused Binance of facilitating currency speculation that significantly devalued the national currency, the naira. The situation intensified when Nigerian authorities invited two Binance executives to the country, subsequently arresting them. Reports indicate that one of the executives managed to escape.

The back-and-forth between Binance and Nigerian authorities highlights the ongoing challenges and complexities faced by global cryptocurrency platforms operating in jurisdictions with stringent financial regulations. It also underscores the Nigerian government’s struggle to balance the need for financial innovation with the imperative of currency stability.

While the Central Bank of Nigeria denies issuing any new directives against specific cryptocurrency platforms, the underlying tensions between financial regulators and the crypto industry continue to simmer. As both sides navigate this turbulent landscape, the international community remains keenly interested in how these issues will be resolved, given the potential implications for the global cryptocurrency market.