certain individuals for allegedly trading cryptocurrency, breaching a 5 February 2021 directive. The mandate did not however place any new ban on digital currencies, but only reiterated a previous warning to banks to not deal with them and to ensure account holders are compliant with the central bank’s anti-money laundering and transaction monitoring requirements.
Yet, some banks in the country not only complied with the mandate but took its cue further. For instance, Lagos-based First City Monument Bank (FCMB) instructed its branches nationwide to flag accounts held by 18 to 30-year-old customers with a high volume of crypto transactions, as it believes this may be evidence of the use of Peer to Peer (P2P) exchanges, which currently the only way to trade cryptocurrency in Nigeria.
The average income of Nigerians have been declining for six years straight, while the local currency also continues to lose value. Therefore, cryptocurrencies have provided new hope in the West African nation, leading to a whopping $400 million in cryptocurrency transactions in the country in 2020. By June this year, the value of such transactions has increased by 25 per cent from a year earlier.
However, following a CBN ban on the use of Naira to buy digital currencies earlier this year, traders have been using P2P platforms, which have also been targeted by banks since recently. Brenda, a crypto trader asked: “What happens if Peer to Peer trading is no longer an option? Is this the end?”
