The Central Bank of Nigeria has again directed all commercial banks to avoid any transaction that has to do with virtual currencies.
Virtual currency, also known as virtual money, is a type of unregulated, digital money that is issued and usually controlled by its developers, used and accepted among the members of a specific virtual community.
Director, Financial Policy and Regulation department, CBN, Mr. Kelvin Amugo, explained that the ban was necessitated by money laundering and terrorism financing risks inherent in operations of virtual currencies.
“Transactions in VCs 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 exchanges collapse or close business.
“The development of VCs Payment Products and Services and their interactions with other New Payment Products and Services, give rise to the need for guidance to protect the integrity of the Nigerian financial system. There is, therefore, the need to address the Money Laundering/Terrorism Financing risks associated with VC exchanges and any other type of institutions that act as nodes, where convertible VC activities intersect with the regulated fiat currency financial system.”
