Nigeria’s Central Bank punishes 3 banks with a $1.9M Penalty for Crypto Transactions

Nigeria’s central bank punished three homebuyers for allowing cryptocurrency transactions.

The action is in accordance with the Zenith Financial Institution’s 2021 round, in which the Central Bank of Nigeria (CBN) prohibited banks and other financial establishments from supporting crypto trades or serving crypto customers.

Who all are these banks?

According to reports, the Central Bank of Nigeria fined Stanbic IBTC Bank, the Nigerian unit of Standard Bank Group, 200 million nairas ($478,595). Meanwhile, Access Bank Plc., the country’s largest lender, was fined 500 million nairas ($1,202,733). In addition, United Bank for Africa Plc (UBA) shall pay a penalty of 100 million nairas ($240,547).

According to Stanbic’s Chief Executive Officer Wole Adeniyi, the bank was investigated for supporting two accounts that were utilized for cryptocurrency transactions. He went on to say that, while the financial institution is complying with the regulatory direction, the sanctioned transactions could have gotten beyond the financial institution’s system.

Meanwhile, Access’ failure to close crypto accounts and a crypto buyer on UBA’s clientele energy have brought the lenders to the attention of the watchdog.

According to reports, CBN only uses “advanced capabilities” to detect these compliance flaws.

This is good news for crypto enthusiasts…

Despite the crypto bans, Nigeria is one of the rising nations with a high adoption score.

It had shown that the country contributes a considerable portion of transaction volumes on peer-to-peer (P2P) networks.

The blockchain information portal also stated that Africa’s most populated country has the highest proportion of retail consumers transactions under $10,000.

Furthermore, Nairametrics recently stated that despite the restriction, residents continue to trade cryptocurrency. According to the data, Nigeria’s peer-to-peer transactions increased by 16 percent on an annual basis. Paxful and Localbitcoins, Nigeria’s P2P systems, clocked a total of $400 million.

Having said that, the CBN also formally introduced the CBDC e-naira in October of last year. Analysts’ data, on the other hand, indicate that Nigerians prefer private crypto over e-naira.

Despite some brief interest shortly after the CBDC’s establishment, evidence suggests that locals have shifted their support to cryptocurrency as a result of Naira’s poor performance.

It is worth noting that Naira’s free slide has been crimping the financial sector for quite some time.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing