Nigeria’s Central Bank puts a stop to fintech new account openings in order to control cryptocurrency trading.
The Central Bank of Nigeria (CBN) has instructed four fintech companies to halt the creation of new accounts in order to prevent crypto traders from accessing them, according to a report from Nigerian news outlet Techcabal. The affected companies, Moniepoint, Palmpay, Opay, and Kuda, are key players in the fintech sector and play a crucial role in facilitating crypto trading in Nigeria. An executive familiar with the situation confirmed that this is a temporary suspension. The directive from the CBN came shortly after the Economic and Financial Crimes Commission (EFCC) blocked over 1,140 bank accounts allegedly linked to illicit foreign transactions. The CBN had already engaged with the affected firms prior to issuing the directive, as it believes that cryptocurrency traders were using these fintech platforms to disrupt the foreign exchange (FX) market. However, the CBN still views fintech firms less favorably compared to traditional banking platforms, which have a better relationship with the regulator. The struggling Naira has been blamed on cryptocurrencies, with Presidential aide Bayo Onanuga specifically pointing fingers at Binance for setting unfavorable exchange rates that reportedly led to more than $26 billion leaving the Nigerian economy. This directive from the CBN comes shortly after the regulator denied claims that it had instructed local banks to freeze accounts linked with unlicensed crypto service providers. Initial reports suggested that the CBN had placed crypto exchanges under a six-month “Post No Debit (PND) instruction.” Nigeria’s Securities and Exchange Commission (SEC) has also proposed guidelines for crypto firms to combat criminal activities.
