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Central bank of Nigeria warns against digital currencies

Categories : Cash generates security, Cash is trust
January 26, 2017
Tags : Africa, Central Bank, Cryptocurrency, Virtual currencies
The central bank of Nigeria banned digital currencies deeming them difficult to track and frequently used by criminals and terrorists.
Communication Team / Equipo de Comunicación

The central bank of Nigeria (CBN) recently prohibited commercial banks from using digital currencies in a circular sent by Kevin Amugo, Director of the financial policy and regulation department of the central bank. The CBN also warned banks against dealing with non-bank entities acting as virtual currency exchangers and encourage them to monitor such transactions very attentively. In addition, banks must ensure that such companies perform extensive anti-money laundering and counter the finance of terrorism (AML/CFT) checks.

The CBN pointed out that cryptocurrencies are extremely difficult to track and almost anonymous, and are thus susceptible to be used by criminals for money laundering activities, tax evasion or to finance terrorist networks. Moreover, the central bank reminded digital currency owners that they expose themselves to the risk of losing money if the exchanges collapse as virtual currencies including Bitcoin, Ripples, Monero, Litecoin, Dogecion and Onecoin are not considered legal tender in the country.

The Nigerian Securities and Exchange Commission (SEC) had already warned off digital currencies earlier this month.

To read Central Banking’s article [paywall], please click here.