Key Points
- The Nigerian Central Bank has instructed four fintech companies to halt the creation of new accounts.
- This move is aimed at preventing crypto traders from using these platforms, amidst allegations of disrupting the FX market.
The Central Bank of Nigeria (CBN) has instructed four fintech firms, namely Moniepoint, Palmpay, Opay, and Kuda, to stop opening new accounts.
These companies are significant players in facilitating cryptocurrency trading in Nigeria.
Temporary Suspension
An executive familiar with the situation stated this suspension is temporary. This was also confirmed by a statement from one of the affected firms.
The directive from the CBN followed closely after the Economic and Financial Crimes Commission (EFCC), Nigeria’s anti-graft body, blocked over 1,140 bank accounts allegedly associated with illicit foreign transactions.
Regulatory Concerns
The CBN had already engaged with the affected firms prior to issuing the directive. The bank believes that cryptocurrency traders were using these fintech platforms to disrupt the foreign exchange market.
It was also mentioned that the CBN’s perception of these fintech firms is yet to improve, compared to traditional platforms like banks, which have a better relationship with the regulator.
As the Naira struggles, regulators have blamed cryptocurrencies for the nation’s economic struggles. Specifically, Presidential aide Bayo Onanuga blamed Binance for setting the exchange rates for Nigeria, which reportedly funneled more than $26 billion out of the economy.
The current directive comes days after the CBN denied claims that it had mandated local banks to freeze accounts linked with unlicensed cryptocurrency service providers in the nation. According to initial reports, the regulator had placed crypto exchanges under a “Post No Debit (PND) instruction” for six months.
