- A “fake” circular attributed to the Nigerian central bank had sparked panic amongst crypto faithful in the country.
- The CBN only helped to stir further confusion with its response.
- The circular eerily echoed CBN sentiments from the not-so-distant past.
Amid the Nigerian government’s recent crackdown on Binance and other international crypto exchanges for their alleged role in driving down the value of the naira, the country’s crypto scene has been rife with uncertainty.
Against this backdrop of uncertainty, a recent circular claiming to be from the Central Bank of Nigeria (CBN), the country’s apex bank, threatened to throw the space into full-on despair.
“Fake” CBN Circular Sparks Crypto Ban Fears
On Wednesday, April 24, a circular that has now been declared “fake” by the CBN saw several crypto news outlets reporting that Nigeria’s apex bank had issued a directive to banks and all financial institutions to identify and freeze accounts of users who trade “USDT illegally” on popular exchanges like Bybit, Kucoin, OKX, and Binance, arguing that the listed exchanges were not licensed in Nigeria.
Unsurprisingly, the reports and circular had sparked significant consternation among members of the crypto community who feared that the bank was again set to effectively outlaw crypto transactions. The CBN’s chaotic response did not help these fears.
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The apex bank had inexplicably deleted the first post denying the authenticity of the circular, which stoked further uncertainty in the minds of onlookers.
For many, the circular stirred memories of the not-so-distant past while taking the stakes a notch higher.
Not Out of Character
In February 2021, the CBN issued a similar circular barring banks from facilitating crypto transactions. In December 2023, however, Nigeria’s apex bank lifted this embargo, suggesting that the continued growth of the nascent market pointed to regulation as the optimal approach over a blanket ban.
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The recent fake circular is almost identical to the CBN’s statements in 2021, save one key difference: it asserts that merchants on the listed exchanges would be arrested.
At the time of writing, Nigeria’s apex bank has yet to return DailyCoin‘s request for comment on the source of the fake circular and the reason for the CBN’s stuttered response.
On the Flipside
- While the CBN has declared the circular fake, there is still a very real crackdown on crypto exchanges in the country. In 2024, the apex bank called on telecommunication networks to block access to the websites of several popular crypto exchanges in Nigeria as part of supposed efforts to stabilize the naira.
Why This Matters
Soaring inflation and rapid naira devaluation have seen several young Nigerians turn to crypto, particularly stablecoins like USDT, to safeguard their wealth. The country’s recent crackdown on crypto exchanges has left many on edge, with the recently denied CBN circular threatening to deepen concerns further and roll back progress made at the end of 2023.
Read these for more on Nigeria’s recent crackdown on crypto exchanges with Binance in focus:
Unraveling Binance’s Nigeria Woes as Govt Hunts User Info
Nigeria Wields Binance Exec’s Coworker’s Flight in Bail Hearing
