Nigeria News

UPDATE 1-Nigeria's banks barred from cryptocurrency transactions -central bank

(Adds context on bitcoin in Nigeria)

LAGOS, Feb 5 (Reuters) - Nigeria’s banks and financial institutions are barred from dealing in or facilitating transactions in cryptocurrencies, the central bank said in a circular on Friday, warning that banks which fail to act could face “severe regulatory sanctions”.

The bank directed institutions to identify individuals and entities transacting in or operating in cryptocurrency exchanges within their systems and immediately close their accounts.

Bitcoin use has boomed in Africa in recent years, driven by payments from small businesses and remittances sent home by migrant workers.

Much of the growth was driven by Nigeria, which has a large, young, tech-savvy population and a weak national currency, the naira, which makes it difficult to get the U.S. dollars needed to import goods or services.

But the central bank has argued that cryptocurrencies, which are unregulated and not legal tender, are risky for the user.

In June, small cryptocurrency transfers totalled nearly $56 million, nearly 50% more than a year before. The number of transactions jumped over 55% to 120,000. (Reporting By Alexis Akwagyiram; Writing by Libby George Editing by Catherine Evans)