Nigerian Fintechs Challenge Crypto Usage: Bitcoin (BTC) and Ethereum (ETH) Investors Face Pressure

• Nigerian fintech platforms, including Moniepoint, PalmPay, and Paga, have increased their measures against cryptocurrency transactions in line with directives from the Central Bank of Nigeria (CBN).
• Users of these platforms are now at risk of having their accounts blocked if they engage in crypto-related activities.
• Moniepoint has issued a notification to its customers stating that accounts involved in crypto transactions would be closed and user details shared with relevant authorities.

Nigerian fintech platforms tighten measures against cryptocurrency transactions, enforcing Central Bank of Nigeria’s directives, resulting in potential account closures for users.

Nigerian Fintechs Enforce CBN Directives

Several Nigerian fintech platforms, including Moniepoint, PalmPay, and Paga, have intensified their measures against cryptocurrency transactions. These actions are in line with directives from the Central Bank of Nigeria (CBN). Users of these platforms now face the risk of having their accounts blocked if they engage in crypto-related activities.

Moniepoint Notifies Customers of Account Closure

On May 2, 2024, Moniepoint issued a notification to its customers. It stated that accounts involved in crypto transactions would be closed. It also mentioned that user details would be shared with relevant authorities. This step follows CBN’s guidelines for regulating the digital currency space.

PalmPay and Paga Follow Suit

Similarly, PalmPay and Paga have also communicated to their customers the risks of engaging in cryptocurrency transactions. A user of PalmPay reported that his account was frozen due to such activities. The account will only be unfrozen if he agrees to abstain from any future crypto transactions. In a recent email, Paga reiterated its commitment to adhering to CBN’s regulations. They reminded their customers that transactions in cryptocurrency are strictly prohibited.

CBN’s Stance on Cryptocurrencies

In December 2023, the CBN seemed to soften its stance on cryptocurrencies. It issued a circular allowing financial institutions to open accounts and provide services for crypto firms. This circular also claimed to supersede previous ones from 2017 and 2021. However, recent actions by fintech firms suggest a more stringent application of the rules.

CBN Directives to Banks and Financial Institutions

Earlier, CoinOtag media reported on directives from the CBN to all banks and financial institutions. They were instructed to identify and monitor individuals or entities transacting with cryptocurrency exchanges. According to these directives, such accounts must be placed under a Post No Debit (PND) instruction for six months. Under the PND instructions, customers are prohibited from performing certain transactions, including withdrawing funds or making payments.

Conclusion

The tightening of measures against cryptocurrency transactions by Nigerian fintech platforms reflects the CBN’s firm stance on digital currencies. Users engaging in crypto-related activities face potential account closures and other restrictions. As the regulatory landscape continues to evolve, it remains to be seen how these developments will impact the Nigerian crypto market in the long term.