By Adedoyin Falolu
Mr Osita Nwanisobi, Acting Director, Corporate Communications, Central Bank of Nigeria has explained why it banned cryptocurrency-related transactions in the country, claiming the digital currency is used for money laundering and terrorism.
The regulator said this in a statement Sunday, days after affirming a 2017 directive to financial institutions to block cryptocurrency accounts.
The decision has sparked outrage from mostly young people in a country that is the world’s second-biggest user of virtual currencies like Bitcoins.
The statement stated that the ban on such transactions will not have any negative impact on fintechs, Daily Trust reported Sunday.
“The uses of cryptocurrencies in Nigeria are a direct contravention of existing law,” the statement said, according to Daily Trust. “It is also important to highlight that there is a critical difference between a Central Bank issued Digital Currency and cryptocurrencies. As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities,” Nwanisobi explained.
He later added, “The question that one may need to ask therefore is, why any entity would disguise its transactions if they were legal.”
“It is on the basis of this opacity that cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion.