Kelvin Daminabo
The Central Bank of Nigeria (CBN) has taken a significant step to curb crypto trading in the country by directing four major fintech companies to pause creating new accounts. According to a report by Techcabal, Moniepoint, Palmpay, Opay, and Kuda have been instructed to cease opening new accounts, which are crucial for facilitating crypto trading in Nigeria.
This temporary suspension comes shortly after the Economic and Financial Crimes Commission (EFCC) blocked over 1,140 bank accounts allegedly associated with illicit foreign transactions. An executive familiar with the development confirmed that this was a temporary measure, and a statement from one of the affected firms also acknowledged the directive.
Sources revealed that the CBN had engaged with the affected firms prior to issuing the directive, citing concerns that cryptocurrency traders were “leveraging the fintech platforms to disrupt the FX market.” The CBN believes that these fintech firms, unlike traditional banks, have a perceived lack of transparency and accountability, leading to a strained relationship with the regulator.
The Nigerian government has been struggling to stabilize the economy, with the Naira facing significant challenges. Regulators have blamed cryptocurrencies for the nation’s economic struggles, with Presidential aide Bayo Onanuga specifically accusing Binance of setting exchange rates for Nigeria and funneling over $26 billion out of the economy.
This directive comes days after the CBN denied claims that it had mandated local banks to freeze accounts linked with unlicensed crypto service providers in the nation. Initial reports suggested that the regulator had placed crypto exchanges under a “Post No Debit (PND) instruction” for six months.
The CBN’s move is seen as a bid to regulate the crypto market and prevent illegal activities, but it also raises concerns about the freedom of individuals to access financial services. The fintech companies affected by the directive are crucial for many Nigerians who rely on them for financial inclusion and accessibility.
As the situation unfolds, it remains to be seen how the CBN’s directive will impact the crypto market in Nigeria and the broader fintech sector. One thing is clear, however: the Nigerian government is determined to assert control over the crypto space and ensure that it does not disrupt the traditional financial system.