The central bank of Nigeria has officially outlawed digital currency as financial institutions especially banks. This comes after a warning by the SEC to the public on precautions to take if dealing with these currencies while reiterating how virtual currencies remain unregulated and should be avoided.
Citing reasons such as money laundering being the main cause of the decision, the Bank hopes to limit funding to terrorism which is rife in the country.
“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;
1) Ensure that you do not use, hold, and /or transact in any way in virtual currencies;
2) Ensure that existing customers, that are virtual currency exchangers, have effective AML/CFT controls that enable them to comply with customer identification, verification and transaction monitoring requirements;
This does come as a significant setback for the adoption of Bitcoin in the area as after the decision many banks will be swayed against innovating in this area while other African countries develop Bitcoin infrastructure, Nigeria may only see further improvement after defined legislation is put into place to regulate the currency for the economies needs.
To conclude while the CBN has prevented the integration of virtual currencies in conventional banks and financial structures, alternative methods such as online exchanges will provide an option for those wanting to purchase cryptocoins. The current lack of regulations surrounding Bitcoin exchange will allow you to legally purchase Bitcoin currently from exchanges such as the NairaEX exchange. Furthermore while financial institutions will not be able to deal with or store crypto, the BTC.com, wallet is ideal for safe and accessible storage solutions when banks may not be the answer.