On Wednesday the apex bank of Nigeria CBN made warning to Nigerians to be cautious of investment in digital currencies. Specifically investment in cryptocurrency stressing that virtual currency is not legal tender in Nigeria.
CBN said cryptocurrencies such as bitcoin, ripples, monero, litecoin, dogecoin, onecoin and exchanges such as NairaEx were not licensed or regulated by the CBN
Cryptocurrencies are a type of digital currencies, alternative currencies and virtual currencies. designed to work as a medium of exchange that uses cryptography (the art of writing and solving codes), to secure its transactions it use decentralized control as opposed to centralized electronic money and central banking systems.
The statement, signed by the bank’s Acting Director in charge of Corporate Communications, Isaac Okorafor, emphasised that dealers and investors in any kind of cryptocurrency in Nigeria were not protected by law.
“The CBN therefore warned Nigerians against investing in cryptocurrency as doing so would be at their own risk” the statement said.
Mr. Okoroafor added that the legal implication of such arrangement is that they may be unable to seek legal redress in event of failure of the exchangers or collapse of the business.
Earlier in January 2017, the CBN had issued a circular to banks and other financial institutions on virtual currency operations in Nigeria.
In the circular, signed by the Director, Financial Policy and Regulation Department, Kevin Amugo, the CBN noted that virtual currencies were traded in exchange platforms that are unregulated all over the world.
It further noted that transactions in virtual currencies were largely untraceable and anonymous thereby making them susceptible to abuse by criminals, in cases of money laundering and financing of terrorism.