Don't trade in virtual currencies like bitcoins, CBN warns banks

The Central Bank of Nigeria (CBN) has issued a circular to banks and other financial institutions not to “use, hold, trade and/or transact in anyway in virtual currencies.”

According to CBN, virtual currencies such as Bitcoins, Monero, Ripples, Litecoin, Dogecoin, Onecoin, e.t.c and other similar products are not legal tender in Nigeria, thus any bank or institution that transacts in such businesses does so at its own risk.

The Director, Financial Policy and Regulation department of the apex bank, Mr. Kevin Amugo, stated that the reason for the warning is that transactions in virtual currencies are largely untraceable and anonymous making them susceptible to abuse by criminals, especially in money laundering and financing of terrorism.

“VCs are traded in exchange platforms that are unregulated all over the world. Consumers may therefore lose their money without any legal redress in the event these exchangers collapse or close business”, he said.

This warning issued may not be unconnected with the recent increase in the transactions in virtual currencies especially the recent statement from the ponzi scheme, MMM, that members will now be able to pay and receive money in bitcoins, the digital currency – citing bitcoin’s steady growth in value as a reason for participants to adopt the currency.