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Virtual currencies not legal tender in Nigeria, says CBN

Written by White Angelis

The Central Bank of Nigeria (CBN) has announced virtual currencies – Bitcoins, Ripples, Monero, Litecoin, Dogecoin, Onecoin, et al, aren’t legal tenders in Nigeria and people using them are doing so at their own risk.

In a circular to banks and other financial institutions dated January 12, 2017, CBN acknowledged the impact of virtual currencies in the payment industry across the world but stated its risks outweigh its benefits.

It stated transactions in virtual currencies are largely untraceable and anonymous, which makes them easily abused by criminals with regards to money laundering and financing of terrorism.

The CBN went further to state virtual currencies are traded on unregulated platforms, as such if they collapse or go out of business – Japan’s Mt. Cox comes to mind – customers may find it very difficult to get their money back.

The development of VCs Payments Products and Services (VCPPS) and their interactions with other New Payment Products and Services (NPPS) give rise to the need for guidance to protect the integrity of the Nigerian Financial System,” said Kevin N. Amugo, Director, Financial Policy and Regulation Department at CBN.

He added, “There is therefore the need to address the Money Laundering/Terrorism Financing (ML/TF) risk associated with VC exchanges and any other institution that act as a node where convertible VC activities intersect with the regulated fiat currency financial system.”

In view of these risks, the CBN has directed all banks in the country to not trade in virtual currencies in any way, ensure existing virtual currency exchangers comply with AML/CFT controls, and report suspicious transactions by exchangers to the Nigeria Financial Intelligence Unit (NFIU).

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White Angelis

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