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April 6, 2022

Local Banks in Nigeria penalized for allowing crypto payments

According to Bloomberg, the Central Bank of Nigeria (CBN) has levied financial fines on four commercial banks in the country for supporting crypto-related transactions.

Access Bank Plc, Stanbic IBTC Bank, United Bank for Africa (UBA), and Fidelity Bank Plc are among the sanctioned banks.

The greatest fine was levied on Access Bank, which was fined $1.2 million, followed by Stanbic IBTC, which was fined $480,594. UBA was fined $240,298 while Fidelity was fined $34,362.

Remember that in February 2021, the CBN issued a circular forbidding banks from assisting crypto-related transactions, claiming that the asset class is a threat to the country’s financial system.

Stanbic IBTC CEO Wole Adeniyi stated that the bank complied with CBN regulations. Crypto-related actions, on the other hand, went undiscovered on its platform, which the apex bank was able to trace using modern technology.

Despite the country’s strict crypto regulations, Nigerian investors continue to invest in cryptocurrency.

Nigerians have no choice but to use P2P platforms because banks and other institutions were not allowed to offer crypto services. Following the prohibition, the West African nation became Africa’s largest crypto peer-to-peer (P2P) market.

With over 1.5 million users at the time, the country became Paxful’s largest market, with considerable trading volume of up to $1.5 billion.

Nigeria’s Securities and Exchange Commission (SEC Nigeria) has established a fintech branch to investigate digital assets and develop legal frameworks to protect crypto investors as part of its effort to regulate the crypto business.

Meanwhile, Nigeria released its Central Bank Digital Currency (CBDC), named eNaira, in October, but crypto fans in the country appear to be unimpressed.

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