Yesterday morning, we all read that the Central Bank of Nigeria (CBN) was front and center issuing a sweeping directive that roped in Deposit Money Banks (DMBs), Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs), and even the general public.
The command was crystal clear. Keep tabs on anyone wheeling and dealing with the likes of Bybit, KuCoin, OKX, and Binance. This was not just another bureaucratic shuffle but a call to action, spotted first in a letter that CoinDesk claimed it got a peek at.
The communication reminded financial institutions that diving into cryptocurrency dealings or easing the path for crypto exchange payments remains off-limits. It’s no news flash that cryptos and the CBN aren’t exactly pals, but this reiteration put a fine point on it.
The Drama Continues
This recent hammer drop is a sequel to the Binance-Nigeria drama —a drama that’s snagged international headlines and soured many a coffee break chat.
Here’s the recap:- Nigeria throws the book at Binance, blaming it for a nosedive in the naira’s value thanks to some shady currency speculation. Things got even more serious, with the government rolling out the welcome mat for two top Binance execs, only to slap the cuffs on them, and—plot twist—one breaks free!
CBN’s new directive was loaded with teeth. They wanted these flagged accounts slapped with a “Post No Debit” (PND) order for six months. Break the rules and brace for “severe regulatory sanctions.” And it’s not just about freezing funds.
The letter also threw shade at any “perpetrator” or “suspected agent” who’s been playing the crypto market under the radar, particularly those sneaking around buying and selling USDT. The CBN’s message was basically, “We’re watching, and we’re not playing games.”
Interestingly, the big bad directive made no mention of homegrown crypto outfits like Flincap. According to Nathaniel Luz, the CEO of Flincap, that’s likely because Nigerian crypto firms are already queuing up to get the green light on the necessary licenses.
Clarification Amidst Confusion
But THEN — Come Wednesday, the CBN is on Twitter, saying, “Hold up, we never said that!” According to them, the terrifying circular that had everyone buzzing? Not their baby. They’re telling everyone to chill and double-check the facts on their legit website for the real scoop.
But let’s rewind to before this whole mess started. Back in February 2021, the CBN was all about shutting down crypto transactions, citing the usual suspects: money laundering, terrorism financing, cybercrime, and that wild ride known as cryptocurrency volatility.
Flash forward to December, 2023, and it’s like we’re in a different storyline. The ban’s lifted, and the CBN is now playing coach, handing out guidelines to banks and financial institutions on how to handle crypto operations, specifically with Virtual Assets Service Providers (VASPs).
For those scratching their heads, VASPs are the go-betweens in exchanges involving virtual assets and good old cash. This latest episode from the CBN hints at a potential change of heart, or at least strategy, when it comes to crypto dealings.
It’s a plot twist that has everyone guessing what the next episode will bring in Nigeria’s crypto drama.